As 2025 winds down, small-cap companies listed on the NASDAQ Capital Market, NYSE American, TSX Venture Exchange, and Canadian Securities Exchange (CSE) have navigated a particularly challenging year. Despite broader market highs and sector-specific tailwinds — from AI advancements to resource booms — many undervalued stocks remained mired in low visibility, persistent short pressure, and stagnant trading volumes. Reverse stock splits, while common, often failed to deliver lasting momentum, highlighting the need for more proactive strategies.

At Hummingbird Capital Inc., we've spent decades in the trenches, both leading public companies through aggressive short attacks and advising on successful defenses. Our performance-aligned approach has helped clients achieve significant recoveries, with gains of 20-50% or more in months through targeted investor awareness and strategic actions. As we look to 2026, here's our outlook and actionable insights for issuers ready to reclaim control.

The 2025 Landscape: Short Pressure Persists

This year saw elevated short interest in small-caps, often exceeding 10-30% of float in sectors like tech, biotech, and resources. Volatility amplified the impact: even companies with solid fundamentals faced downward spirals from negative sentiment and low liquidity. Regulatory scrutiny on short selling increased, but for issuers, waiting for market-wide changes isn't enough. The key lesson? Defense starts with offense — building awareness to flip sellers into buyers.

What to Expect in 2026: Opportunities Amid Uncertainty

Markets are poised for continued volatility, with interest rate shifts, geopolitical tensions, and economic data driving swings. For small-caps, this means:

Increased Institutional Scrutiny: Funds will favor companies with strong narratives and liquidity — rewarding those who proactively engage investors.

Short Interest as a Catalyst: High shorts (10%+) can become opportunities; well-timed communications and corporate actions can trigger covering waves.

Regulatory Tailwinds: Exchanges like NASDAQ and NYSE American continue to refine listing standards, making uplisting more accessible for prepared juniors on TSX-V or CSE.

The winners? Companies that invest in visibility now, positioning for capital raises, acquisitions, or organic growth with less dilution.

Proven Strategies for Defense and Growth

Based on our track record, here are key tactics for 2026:

Strategic Investor Awareness: Don't rely on organic discovery. Targeted campaigns — leveraging institutional networks, market makers, and retail channels — highlight undervaluation and milestones. We've seen this drive 2-5x volume increases, shifting sentiment and attracting long-term holders.

Timed Communications & Outreach: Align announcements with market dynamics to maximize impact. Proprietary methods, like coordinated updates and digital amplification, can foster momentum without hype — fully compliant with SEC and exchange rules.

Shareholder-Friendly Corporate Actions: Simple moves, such as distributions or restructurings, can enhance value while intensifying pressure on shorts. These often lead to rapid covering, especially in high-short environments.

Performance-Aligned Advisory: We structure engagements with modest retainers and bonuses tied to metrics like volume growth, short reduction, or market cap gains — ensuring we're partners in your success.

Our clients on NASDAQ Capital Market and NYSE American have benefited from these approaches, turning defensive positions into offensive wins. For TSX-V and CSE issuers eyeing uplisting, integrating awareness early makes the transition smoother.

Looking Ahead: Position Your Company for Success

2026 offers a reset for small-caps ready to act. With potential economic recovery and sector rotations, now is the time to defend your stock and build a foundation for growth.

If your company is trading on NASDAQ Capital Market, NYSE American, TSX Venture, or CSE and facing short pressure or liquidity challenges, let's connect. Reach out for a confidential discussion or to request our 2025 case studies.

Contact Gilles Trahan at gtrahan@hummingbirdcap.ca or +1 416 640-9822 ext 321.

Hummingbird Capital Inc.

www.hummingbird-capital.com