I spoke at an SVASE conference in Mountain View earlier this year. The audience was a group of entrepreneurial Valley CEOs and they had turned up for a buffet lunch and an introduction to London’s AIM exchange. Our hosts – Fenwick & West – provided a very convivial environment and the occasion was interesting both anthropologically and commercially.
From an anthropological perspective, it was worthy of note that while CFOs seem exclusively to attend breakfast meetings on AIM, CEOs obviously prefer lunch.
But I digress; back to the event. The evolutionary stage of the dozen or so businesses there, ranged from early prototypes to seriously established companies.
After my presentation which I shared with a British attorney – Andrew Gowans of Osborne Clarke (who uniquely for British law firms has a non-practicising ambassadorial office in Palo Alto with the express purpose of providing European law support in California) - we opened up for Q&A.
The questions were as wide ranging as the companies. The prize for the oddest went to the one I have chosen as the title for this blog.
What’s The Average Price Of An AIM Share?
I have to admit that it stumped me.
Not because I don’t know the answer – I don’t – but because not only do I have zero interest in the question, I can’t imagine what motivated the poor man to ask it. As I pointed out on the day, knowing the average price of a share would be about as beneficial as knowing that of an apple in your local Farmers’ Market – totally useless.
However, with hindsight, I fear that I may have been a little harsh. There clearly is a lack of easily accessible data about AIM which, were it available would have enabled the poor man to have answered his own questions in private and so avoided the embarrassment of asking it in public.
Perhaps what he really meant to say was that the absence of data leads to the formation of rumours and innuendo and unfounded conclusions – one of the best of which is that there’s no liquidity on AIM (see my earlier blog on this subject)
So now I feel contrite – perhaps my answer should have been less New York and a bit more California or even just plain British polite .
I certainly know from the look on his face that he found the Farmers Market metaphor confusing and I just took advantage of the moment to move on, rather than to feel his pain. So, to atone for my peevishness, I have resolved, well ahead of the New Year, to make amends.
I therefore hereby resolve to publish a summary of the key AIM market statistics, each month, and to top them off with a quarterly summary.
To catch up with what’s happened since aim4tech was launched this blog contains October and December’s update.
The focus of the analysis will be IPOs – how many, what type, where they’re from, etc.
Before I show you October’s data it’s probably helpful to have some background.
As shown in this first chart, by the end of September there had been 330 new companies listed on AIM of which 242 were brand new IPOs (rather than emigrants from the other market, or re-entrants after having been suspended while executing an acquisition, reorganisation or the like).
The IPOs of that period had raised, in aggregate, $11bn
In October a further 26 IPOs occurred, raising $1.7bn.
And November saw 20 more debuts who collected $1.6bn between them.
As a side comment, it has become commonplace in the media to talk of AIM “slowing down” with the implication that the window of opportunity is closing.
Well, call me old fashioned, but I would say that if 46 IPOs and $3.3bn represents slowing down, I’m all for gentle walks!
The real question though, is not how big the market is; but rather what kind of climate exists for technology companies and US-based businesses.
The next two charts answer these questions.
$326m raised by 14 tech companies with a combined market cap on IPO of $3bn.
Interestingly, the tech list included no US companies.
However five US businesses did raise $83m with a combined market cap of $2bn during October and November.
So the inescapable conclusions are:
• AIM may have slowed, but it sure ain’t stalled
• AIM welcomes US companies
• AIM welcomes tech companies
Which leaves just one, big, fat, multi-billion dollar question hanging unaswered in the air - not what's the price of an average share - but why are US tech companies so uncharacteristically shy of London?
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