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Valuing A Tweet: Reflections Following The Purchase Of A Personally Symbolic Non-Fungible Token

Mar. 09, 2021 4:57 AM ETABXXD, BRK.A9 Comments
James Duade profile picture
James Duade's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Long Only, Value, Special Situations, Contrarian

Seeking Alpha Analyst Since 2009

I started investing several years ago after being Inspired by the works of Benjamin Graham and the shareholder letters of Warren Buffett. My investment ideas are generally guided by Mr. Graham's margin of safety principle, and are adapted to a variety of different market sectors.


  • On Friday, March 5th Jack Dorsey offered to sell his first ever Tweet on the site Valuables igniting interest in the rapidly growing Non-Fungible Token "NFT" market.
  • NFTs are cryptographically hashed data which is tokenized in a blockchain such as Ethereum. These unique tokens can help define property rights on the internet.
  • Purchasing a Tweet in some ways is like purchasing an autographed piece of history by the Tweet author. The value of that signature and history is in the eye-of-the-beholder.
  • The author uses a historically significant example of Warren Buffett's 1966 Buffett Partnership Letter, of which there are few if any personally autographed copies.
  • The author also describes his rationale for purchasing a personally significant Tweet.


In May of 1965 Warren Buffett’s Buffett Partner Limited "BPL" took control of a run down New England textile mill called Berkshire Hathaway (BRK.A). The hostile takeover followed a contentious back and forth between Buffett and Berkshire’s former CEO Seabury Stanton who Buffett felt was significantly mismanaging the company. The previous year Buffett and Stanton had agreed that Stanton could repurchase BPL’s shares in Berkshire for the price of $11.50. Stanton had a change of heart and offered $11.3875 per share and tried to chisel Buffett. The reneging of the agreed upon price incensed Buffett and led him to use BPL’s capital to purchase enough shares to allow for a hostile takeover of Berkshire in 1965. As most investors know the purchase of the textile mill was an uncharacteristically poor investment by Buffett and the mill was eventually closed three decades later in 1995. That being said, the purchase of Berkshire is historically significant as it allowed Buffett to transition BPL from a small private investment fund to a multi billion dollar publicly traded company. Buffett obviously didn’t know it at the time, but his January, 1966 partners letter to BPL investors where he explained the Berkshire purchase for the first time became one of the most pivotal moments in the history of value investing.

Source: Excerpt from Warren Buffett's 1966 Buffett Partnership Limited Letter

Physical copies of Warren Buffett’s January, 1966 BPL shareholder letter are exceedingly rare (see pages 85-94 to read it yourself), and to my knowledge no signed copies by Buffett exist. That being said a signed copy of the 1966 letter by Buffett would be a cherished keepsake for any value investor or institution that has been deeply influenced by Buffett and his investment style. Each year Buffett auctions off an hour or so of his time to have lunch with an investor donating the proceeds to the Glide foundation--the 2019 lunch went for $4.5 million. In that context one can imagine that if a rare autographed one-of-a-kind 1966 Buffett letter was ever unsurfaced it could fetch a kings ransom in an auction (assuming the proceeds went to charity). Hedge fund managers, business schools, and other institutions could all be interested in a memento with such historical significance.

The above is an extreme example of how an exceedingly rare and historically significant document could create a bidding frenzy among a group of people interested in a one-of-a-kind non-fungible asset.

NFTs what are they?

This past Saturday Jack Dorsey, the CEO and co-founder of Twitter, offered to sell his first official Tweet as a non-fungible token or "NFT" on the website valuables. The Tweet quickly escalated in price from just a few hundred thousand dollars to $2.5 million. Valuables allows users to digitally hash their Tweet into a blockchain making it a secure token that can be tracked as it is exchanged from one party to the next. Unlike Bitcoin (BTC-USD) or Ethereum (ETH-USD), which are relatively plentiful and interchangeable (i.e., fungible), non-fungible tokens are one of a kind block(s) of data on the chain that users can trade (i.e., not fungible). These NFTs can then be stored in a digital wallet along with other blockchain assets such as crypto coins like Bitcoin, Ethereum, etcetera. Valuables used MetaMask as their digital wallet of choice, but users can eventually transfer their NFTs to other digital wallets if they choose.

Source: Valuables Auction of Jack Dorsey's First Tweet

In the case of Valuables, tokenizing a Tweet as an NFT essentially becomes a one of a kind autograph from the author of the Tweet. When the author agrees to sell the Tweet they officially hand over the ownership of that Tweet NFT to the buyer. Given this context one can see how a historically significant and one-of-a-kind asset such as Jack Dorsey’s first ever Tweet could fetch such a high price at auction.

Please see "But what do NFTs have to do with Abaxx?" section below for additional discussion on NFTs.

I bought a Tweet

I never thought the phrase “I bought a Tweet” would be uttered in my lifetime, and yet thousands of people did just that this month, and I was one of them. As with any collectible, the value of the item is in the eye of the beholder, so what is meaningful and valuable to one person may have zero significance or value to someone else. In other words one man’s treasured Tweet, may be another man’s circular file.

With the above said, I know full well that many will quickly judge me as eccentric or nuts for putting down $20.20 to purchase a Tweet. Especially an obscure Tweet announcing the reverse take over of a junior Canadian iron mining firm by a Barbados based blockchain company, but that announcement to me is both personal and historically significant. 

Source: Valuables

Let me tell you the quick history of New Millennium Iron.

What's Past is Prologue: Some History on New Millennium Iron

Towards the end of World War II North America was running dangerously low on high grade hematite deposits that averaged over 60% Fe. Hematite--also known as Direct Shipping Ore or DSO--can be mined, lightly processed, and stuffed into a blast furnace to make pig iron for steel making. The Mesabi, Vermilion, Marquette and Gogebic iron ranges in the Great Lakes region of the United States had powered the American industrial revolution over the past hundred years, but were nearly depleted by the 1940’s and became a national security threat for the US. Around the same time several explorers found nearly 250 million tonnes of high grade DSO in a remote Northern region of Canada named Schefferville (nicknamed Sufferville by some locals for it's punishing winters). The US desperate for high grade DSO formed a partnership with Canada to help build out the enormous infrastructure that would allow for the DSO to be mined in the provinces of Quebec and Newfoundland and Labrador, and shipped off to US blast furnaces located in the Great Lakes.

The infrastructure built out for this undertaking was enormous. A port capable of loading millions of tonnes of ore each year was constructed near the mouth of the Saint Lawrence River in Sept-Iles Quebec. A nearly 600 kilometer railway was constructed over challenging terrain from the port in Sept-Iles to the DSO deposits in Schefferville. An iron ore plant capable of mining and processing millions of tonnes of DSO each year along with a city (i.e., Schefferville) that could support hundreds of workers in a remote Canadian outpost was built up from nothing. Most impressive and awesome of all was the construction of the St. Lawrence Seaway which allowed a special carrier of iron ore vessels called Seaway Maxes to ship approximately 30,000 tonnes of iron ore from Sept-Iles to US based Great Lakes steel makers. With the infrastructure in place the Iron Ore Company of Canada was born and began mining iron ore in 1952 with the first ore shipped from Sept-Iles in 1954.

Cain's Legacy: The Building of Iron Ore Company of Canada by Geren & McCullogh

By the late 1950's and early 1960's new iron ore concentrating technology developed by EW Davis and the University of Minnesota allowed for the efficient and economical mining of low grade iron ore deposits known as Taconite. Taconite, unlike hematite, is composed of low grade iron ore that is finely dispersed bands of magnetite contained within silica and other gangue materials; Taconite normally averages about 25-30% Fe. Davis discovered that by crushing, grinding, and magnetically concentrating the Taconite he could separate out the high grade magnetitie (hence the name) and create a concentrate that was a higher grade and quality than DSO (concentrate can be nearly 70% Fe). The concentrate on its own looked dark gray and had the consistency of flour, that would suffocate a blast furnace and be inefficiently used. Davis went on to discover by binding the fine concentrate together with an adhesive property like bentonite the concentrate could be pelletized and efficiently used in a blast furnace. Furthermore, the environmental impact of creating pellets was far less than creating DSO sinter feed (sintering involves burning to fuse hematite particles together to create an efficient blast furnace feed). Davis's discovery revolutionized North American iron markets and between the 60's and 70's led to a slew of Taconite mines being created on the Minnesota Mesabi iron range. In Canada the Labrador Trough was home to a host or rich iron ore geology and every summer sent off young explorers into the wilderness to try and find Canada's next big iron taconite mine.

Pioneering with Taconite by E.W. Davis

In 1960 a young geologist working for the "IOCC" was on an expedition near Howells Lake, approximately 30 km's North West of Schefferville. Mr. Martin was searching for DSO, but instead found an enormous ore body of taconite with extremely attractive geological features. As mentioned above, while taconite has a low iron content relative to hematite the material can be beneficated in order to produce a high quality iron product that is often superior to hematite and much more environmentally friendly. At the time of LabMag's discovery taconite was cost prohibitive to produce in that region, for this reason in spite of extensive investigation IOCC decided to suspend further development, so Mr. Martin was forced to make a mental note of the deposit and move on.

LabMag Iron Ore Deposit: Historical drill blocks

Around the same time the IOCC (and other firms) moved forward with creating a meta taconite (similar to taconite but a coarser material with higher percentages of hematite and slightly different mineral characteristics than taconite) mine in Labrador City (200 km South of Schefferville). In the 1960's and 70's the discovery and development of large quantities of DSO in Australia, Brazil and South Africa wound up creating a global supply glut and depressed prices of iron ore so much that it shuttered the Schefferville DSO operations (along with many other iron ore operations around the globe). The IOCC abandoned the Schefferville area, the DSO project, and all of its promising taconite properties that it had lightly explored during the 1960's and 70's. Iron ore and steel making went largely out of favor during this period of time, and didn't return to investor's attention in Canada until the early 2000's with the rise of an industrialized China.

Source: Map of Labrador Trough Iron Ore Regions and Infrastructure

In 2002, over four decades after Robert Martin discovered the LabMag deposit, Robert teamed up with a group of seasoned former IOCC executives (along with other industry execs) to form the LabMag Mining Corporation, which went public in 2004 as the New Millennium Capital Corporation. The initial focus of the fledgling corporation was to develop the large taconite body Mr. Martin discovered in 1960. However armed with decades of experience in IOCC the executives were able to successfully re-stake many of the most promising DSO and taconite properties that the IOCC orphaned two decades prior. NML in large part breathed life back into the moribund Schefferville region which had been abandoned by the IOCC in the early 1980's.

NML Taconite & DSO Claims Map, 2020

Between 2007 and 2015 NML went on to create a strategic partnership with one of the world's largest steel makers Tata Steel. Tata Steel and NML created two strategic JVs to move both their Schefferville DSO project forward, as well as the LabMag and KeMag taconite projects. The relationship seemed like a perfect match initially as NML was heavy on resources and light on cash, and Tata had deep pockets and a need for high quality captive iron ore resources. Towards that end Tata invested heavily in NML; initially buying a 26.2% stake in the company, then investing $350 million to develop the NML DSO project, and eventually signing a deal to spend $50 million on a bankable feasibility study for the LabMag and KeMag Taconite projects. At their peak in 2011, following these positive news releases and riding an iron ore high ,NML had a Market Cap of nearly $1 Billion USD.

Unfortunately, construction and operational challenges at the DSO and Taconite projects combined with a global oversupply of iron ore led to a precipitous fall from grace for NML. By 2016 the company had crashed down to earth and sported a market cap of around $15 million USD. The once promising DSO project that was only supposed to cost $350 million was nearly $1 billion over budget, and the Taconite Project feasibility study was overly ambitious and had a cap-ex price tag that Tata had to walk away from. This all led to a bruising proxy battle later that year. The end result of which was the ouster of the then CEO, a change in the makeup of the board, putting the Taconite projects on a care and maintenance plan, and cutting expenses to the bone. The new board led by Scott Leckie and Daniel Owen (currently director's of Abaxx Technologies) refocused the company on monetizing its many legacy assets, and starting a pivot towards a new business initiative. In my opinion NML shareholders owe Mr. Leckie and Mr. Owen a deep debt of gratitude for essentially saving the company from insolvency.

My personal history with NML is a bit of a rollercoaster. I first invested in the company in January of 2011, just a few months before their peak valuation of $1 Billion. I went on to see my gains evaporated by 2012, and continued to hold at a significant loss through 2015. At that point in time I swore off the company, but watched from the sidelines and even briefly was involved in the 2016 proxy battle.   

Source: NML Stock Chart 2005-2021 (adjusted for 2020 12 for 1 stock split)

By December, 2018 NML traded at a market cap of just $8 million, but had working capital in excess of $17 million and other significant assets on their books that were valued at $0 (e.g., DSO, Taconite properties, port of Sept-Iles assets, Tacora royalty). I detailed my investment thesis at the time in this Seeking Alpha article. In value investing terms NML was a cigar butt that hopefully had a few puffs left in it. 

In August, of 2020 New Millennium announced that they were going through a mutual dissolution of their relationship with Tata Steel. In a cashless transaction NML traded their 4.32% interest in the DSO project in exchange for Tata's 26.2% equity interest in NML. The result reduced NML's outstanding sharecount significantly and set the table for NML to pursue other business initiatives outside of iron ore, a plan they had initially announced in December, 2018. Just six weeks later Abaxx Technologies announced that they would complete a Reverse Take Over "RTO" of NML, and the following day the announcement was Tweeted out by Abaxx's CEO Josh Crumb (see image in I bought a Tweet section). 

Abaxx's NuTac Projects and the Potential for Green Steel

Just before laying-off of the staff, NML completed and filed in July, 2016 its NI 43-101 complaint Pre-feasibility Study on the NuTac Project. Having realized that its previous Feasibility Study undertaken with TSMC employing a slurry pipeline to transport concentrate was too grand scale to be financed in a post boom world of commodities. NuTac was sized to suit the anticipated market demand and replace the proposed pipe line by existing rail transportation to haul the concentrates to a pelletizing site near the Port of Sept-Iles. Although the concept was meant to be a blue print for the future development of the project, there were no takers underscoring the difficulty in attracting enthusiasm for a multi-billion dollar greenfield pelletizing project in Canada. At the end, NML’s giant inventory of Taconite resources transferred to Abaxx Technologies’ RTO for a zero dollar value.

No sooner the RTO was completed than the drumbeats of decarbonization of steel production became louder. Blast furnace / Basic Oxygen Furnace (BF/BOF) steelmaking, which is a mainstay for the production of steel. In reality, the process produces more carbon than steel. In fact making of steel in this method accounts for more than 5% of the total global carbon emissions. With over 100 countries committed to reaching carbon neutrality in 2050, pressure is on the steel industry to drastically reduce its carbon emissions. Decarbonization path runs through increasing the proportion of higher grade pellets in the BF feed and ultimately replacing BF/BOF with electric arc furnaces (EAF) mostly consuming recycled steel scrap. However, EAF requires a certain proportion of direct reduced iron (DRI) for the make-up and quality purposes. The production of DRI also needs higher grade pellets with lower gangue materials.

Taconite, which is mainly a magnetite mineral, is an important source for the production of higher grade pellets to feed for BF and DR processes. Pelletizing of magnetite requires a lower energy input because it generates internal heat during the transformation process. Canada is emerging as an important destination for the green steel production. Recently, the top iron miner Rio Tito (RIO) announced teaming up with a German steelmaker SHS Stahl to set up a pilot scale plant to produce green steel. Rio Tinto will supply high quality pellets from its mine situated in Labrador and use abundant hydro power available in the region to produce hydrogen. The partnership will explore producing DRI using hydrogen, which will be melt in EAF powered by the carbon free electrical energy. As more and more steelmakers will attempt to become carbon neutral by replacing their BF/BOF in favor of green steel processes, demand for quality pellets could sky rocket in the next decade paving way to develop the enormous Taconite resources that Abaxx is now holding.

Abaxx Technologies: World Builders or Bust

It's not very often that you come across a startup that has the potential to reshape how the world conducts business, but Abaxx may very well be that company. Led by visionary entrepreneur Josh Crumb, whose Twitter profile includes "world builder or bust", Abaxx Technologies aims to disrupt the global commodity supply chain by leveraging distributed ledger technology, commonly known as blockchain. Abaxx operates with two core business segments, the first is Abaxx Exchange which is in the process of launching a blockchain based LNG futures contract and gold contract. Additional exchange products in both the energy and metals spaces are likely to follow. In a previous article I wrote in greater detail about how Abaxx can use distributed ledger technology to disrupt the global commodity supply chain.

The Abaxx Technologies arm owns nine process and software user interface patent applications (see image below). Abaxx has also created a foundational internet ssdID (self sovereign digital identity) and messaging protocol called "ID++", as well as a suite of blockchain based applications that leverage the ID++ protocol layer. 

Source: Several of Abaxx Tech's US Patents, I believe patent  20200193449 covers NFTs

The Abaxx suite of applications provide Enterprise based tools for data signing and verifying, video chat, messaging, and a vault for data storage. Many may think that these are simply recreating popular Software As A Service "SaaS" applications such as Docusign (DOCU) for signing and verifying, Zoom (ZM) for video chat, Slack for messaging (WORK), or Box (BOX) for document storage; but what makes Abaxx unique is that all of these SaaS tools are blockchain based and tied together by the ID++ protocol layer (see Venn Diagram image below, as well as slide 27 from Jan. '21 presentation).  

The applications built on the protocol are modular and fundamentally improve productivity in financial services and potenti...

Source: Slide 22 Abaxx Jan. 2021 Investor Presentation

Smarter Markets Infrastructure Market Structure and Trusted Price Discovery Abaxx Exchange: • Energy (LNG to start) • Meta...

Source: Slide 27 Abaxx Corporate Presentation, Jan. 2021

It is my understanding that the ID++ protocol effectively will act as a middleware between a blockchain based protocol such as Ethereum, and the top layer Enterprise applications described above. ID++ will likely securely store the users identity in Ethereum Tokens creating a self sovereign digital identity for the user. When the user logs into ID++ this would provide a single sign on to all of the Abaxx applications and also allow users to selectively share their identity with other institutions such as colleges and universities, websites, or health systems; readers can review the potential of a decentralized identity platform in an excellent CoinDesk article here. Data from the applications such as the sign and verify application will then be saved and hashed into the Interplanetary File System "IPFS" (for readers interested in a quick summary of IPFS, please see the "here's how IPFS works" section of their website IPFS Powers the Distributed Web). In an attempt to create a visual aid for readers, I've created the below doodle of the Abaxx Software Stack. Readers can also ready my take on the importance of blockchain middleware to Abaxx's long term strategy.

Abaxx Software Stack Doodle as envisioned by James DuadeBut What do NFT's Have to do with Abaxx?

As mentioned above Abaxx will be leveraging their ID++ protocol and IPFS in order to hash and save a users futures contracts, documents, or valuable information to a blockchain. These documents or contracts can effectively become NFTs that can be versioned (in the instance of works in progress), referenced (in the instance of important ESG documents and contracts), or traded (in the instance of futures contracts). Important NFTs for a user or an institution can be stored in their Abaxx digital wallet and can be traded to others. The fact that the suite of Abaxx applications all fall under the same umbrella allows the user to have a seamless and well integrated experience across all the applications. Furthermore for individuals and institutions using the Abaxx Exchange software, they will be able to instantly trade and tie ESG documents together in a way that was never previously possible before. In the video clip below (see the article link as well) readers can see how IPFS can be leveraged to create NFTs. It should be noted that storing large data on Ethereum is prohibitively expensive (one estimate pegged it at 17,500 ETH per GB!). So hashing data in IPFS and then storing just the most critical bits of information in Ethereum is most certainly the way to go.

Source: Medium: How to Build NFTs with IPFS

In Abaxx's patent application number 20200193449 (see image and source link below), Abaxx describes this process of using both IPFS and potentially FileCoin (FIL-USD) to achieve this vision.


Putting these items together the larger picture comes into focus. An Abaxx ID++ platform tying together an ecosystem of Abaxx Tech applications which can then be traded on the Abaxx Exchange, or shared and collaborated on by users across the platform. Initial users of ID++ and the Abaxx Enterprise applications will likely come from the early participants in the Abaxx Exchange (i.e., financial institutions, commodity brokers, industry end users of the physical commodities who stand for physical delivery, etc.). This ecosystem on it's own is a potentially large, powerful, and influential group. The user base will be even further expanded when Abaxx begins their initiative to create what Robert Friedman called a "series of verticals" in futures contracts that grade commodities based on their ESG characteristics. An example would be an LNG contract that is paired with carbon offsets effectively making the LNG product carbon neutral to the end user. Another example may be purchasing a copper futures contract that has the appropriate regulatory documents and carbon offsets. End users purchasing these contracts can then use the tokens to illustrate to their auditors or investors that their supply chain is ESG compliant AND they can prove it with their NFTs. Today that is an impossibility but Abaxx's Exchange, Tech applications, and ID++ platform will likely make this dream a reality in the near future. 

I'm hopeful that Abaxx will soon disclose additional information regarding their ID++ and SaaS products. Until then investors like myself will have to speculate on the potential for the company and its products currently in development. That wait hopefully won't be long though, as Erik Townsend host of the Abaxx sponsored Smarter Markets podcast will be interviewing Josh this coming Friday, March 19th on Macro Voices.

Source: Erik Townsend Twitter


Bringing it full circle; on some days I feel like an investor who bought shares in a New England textile mill for $0.50 on the dollar, and who is now about to go on the ride of an investing lifetime. What would an investor who wound up buying shares in Berkshire Hathaway and held for decades pay for a signed copy of the 1966 BPL shareholder letter? What would you pay for a Tweet that potentially changed the course of your life?

*Special thanks to co-founder of New Millennium Iron, Bish Chanda, for providing feedback and edits on the NML section of this article. Mr. Chanda also contributed the three paragraphs in the NuTac section, which were lightly edited by the author.

Analyst's Disclosure: I am/we are long ABXXF, FIL-USD.

I own shares in Abaxx Technologies (ABXXF), as well as a small amount of FileCoin.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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