A step back for tech small caps

Heard from two people this week (we double source things here, TT) that Desjardins Securities might be pulling back from their small cap tech coverage. First, their i-banker left during the summer for a mining CFO role, and now their software research team appears to be gone.

This is unfortunate news, as they were one of the few firms with a decent retail network that would actually initiate and cover domestic tech small caps. With 28 (give or take) dealers from across the country chasing tech deals, perhaps the market is more than a bit overbanked. But Desjardins actually published on the names, which put them in a pretty small group (ie., they just didn’t take the syndicate cheque and then never get around to initiating coverage).

Let’s hope that we don’t see more of this in the run up to the annual i-banking bonus season.

MRM