People want to blame brokers, nomads and the market itself, but the problem really lies with the companies, most of which are not exactly fit to be listed on a Stock Exchange.
There also is a lack of investor education and awareness, thus new investors don’t realise there is a 90% failure rate and that if you hold more than a few months you’re likely to get diluted with a placing. It might be worth borrowing a few ideas from the United States, who have been dealing with this on a much larger scale, for a much longer period of time.
In the US, virtually none of these companies would qualify for the New York Stock Exchange or NASDAQ, they’d be quoted on the OTC markets (historically known as the Pink Sheets) and everyone would know that they were ultra-high risk, possibly fraudulent investments (the particularly dodgy ones engaged in dubious promotions even get a skull and crossbones sign next to them on the OTC quotations these days). Perhaps something like this might be better in the UK and the ones that can’t qualify for the main market are just moved over to the NEX Exchange. Just a thought if anyone actually wanted to clean it up, although smaller, main market companies can pose problems too.
Adopting certain provisions of the 1933 US Securities Act also would help, in particular minimum holding periods for shares issued in placings and disclosure of compensation by paid commentators. Again just a thought for anyone who seriously wanted to clean up the AIM market. Another way, and this approach proved very effective in the US, is when a company announces a new business endeavour and heavy promotion starts off the back of a half page RNS, suspend the shares pending publication by the company of what in the UK would be a new admission document disclosing all information necessary for investors to make an informed investment decision. Interestingly, none of the companies that I am aware of to whom this happened in the US ever came back.
If people seriously want to clean up AIM, there are plenty of ways to do it. The easiest way of course might be just to do the same as the US Securities and Exchange Commission and offer bounties of up to 30% of the fines, penalties and asset confiscations to those who report the scoundrels. These amounts run into the millions and they’ve already awarded approximately $425 million to 79 individuals, with one picking up over $27 million just last month. Now that could certainly lead to some interesting redistribution and roll reversals.
You can still make money from all this though, but not by conventional investment, and that’s what the Special Trading Course is all about. It’s about how to take advantage of what is an imperfect market. It warns you about what to avoid so you don’t get cleaned out, but also informs you of the situations where there can be virtually guaranteed profit. Regarding this, I’ve been asked is it possible to receive the course over a shorter time period than 10 weeks. To accommodate the request, I’ve introduced an option to receive it over 10 days, one part each day. You can still receive the first part free. Read it, see what you think and if it’s not for you, you can cancel with the click of a button and pay nothing. The link is https://www.oilnewslondon.com/daily
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The author holds one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.
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