Trading Aim shares is a popular pastime for many punters. They come with dreams of getting rich quick and, in the fullness of time, often leave empty-handed.
But that doesn’t stop others coming to join the madness. The lax regulation and ease of accessing capital attracts many companies to the stock market, but many of these companies are little more than ideas and dreams. There are some key differences between Aim and the main market, which is the London Stock Exchange’s flagship market for more established companies, and these differences are striking.
For example – no trading record is required to list on Aim. That means pretty much anyone with an idea can propose a listing on Aim, and access private investor cash. A company does not need to be profitable, sustainable, or even generating any revenue, which is great for entrepreneurs, but often not so good for investors. Many companies that have failed to attract venture capital then decide to list on Aim – such as appScatter, which listed in September 2017. At the time, Edison forecast it to be making £1.5m in pre-tax profit for FY19. It was suspended in April 2019, and on 12 September, the chief executive was quoted as saying he was looking forward to the readmission of the enlarged group. A few weeks later, the company delisted from Aim. No explanation was given.