Skip to main content

Silicon valley firms look to London's AIM

We knew that foreign resource and mining companies had flocked to London's Alternative Investment Market (AIM) in recent years, but it still came as a bit of a shock to learn that Silicon Valley firms were looking to do the same.

The front page of today's Financial Times carried this report by Chris Nutall:

Dozens of Silicon Valley companies are lining up to float on Aim, London's junior market, as US businesses weigh up ways to raise funds at home amid the high cost of going public under the Sarbanes-Oxley Act.

More than 100 technology companies have been considering listing on Aim, say industry insiders. London Stock Exchange officials have made at least six visits to the Bay area in the past year to hold seminars and raise awareness.

Gary Benton, a technology lawyer for 22 years in the area and a partner in the Palo Alto offices of Pillsbury Winthrop Shaw Pittman, said the level of interest in the London market was unprecedented.

"Even though Aim has been around for 12 years, no one paid attention to it until six months ago. Since then there's been a pretty steep curve of interest."

As the FT's report mentions, the high costs and hassles associated with Sarbanes-Oxley are driving smaller corporations away from America's financial markets. Instead, these firms hope to find refuge from such burdensome regulation by listing abroad.

Last March, in a commentary on exchange consolidation (see, "Exchange Fever"), I repeated the following arguments regarding SOX's negative impact on the financial markets:

The effect that such onerous legislation may have on smaller public companies is not the exclusive concern of overseas market professionals. Eliot Spitzer has now joined the chorus of critics that say Sarbanes-Oxley has overstepped its bounds and creates "an unbelievable burden for small companies." Amazingly, this same criticism has been leveled by Representative Michael Oxley, co-author of the legislation. Oxley has even urged the SEC to roll back some of the burdens facing smaller companies.

As we can see, the regulatory environment is not only taking its toll on existing companies, it's also drawing new listings away from the NYSE, Nasdaq, and AMEX.

Popular posts from this blog

Finance Trends 2019 Mid-Year Markets Review

Email subscribers of the Finance Trends Newsletter receive the first look at new articles and market updates, such as the following piece, sent out to our email list on Sunday (6/14).   Hello and welcome, everyone! If you received our last email notice over the July 4th holiday, you'll know that this weekend's newsletter will serve as a mid-year market update and a follow-up to issue #29, " How to Reinvest in a Rising Market ".   Ladies and gentlemen, without further ado, let's start the show...  Finance Trends Newsletter: Our Mid-Year Market Review When we last spoke, back in February, the U.S. stock market was rallying off its December-January lows. As the S&P 500 and Nasdaq reclaimed their 200 day moving averages in February and March, it became increasingly apparent that a lot of retail investors (and perhaps some institutional investors) were left under-invested while watching this recovery move from the sidelines.  The U.S. stock ...

Round trip stocks: momentum booms and busts

" No tree grows to Heaven ." - Old proverb adopted by Wall Street. What happens to hot momentum stocks when their rocket fuel runs out? How long can they continue to fly before they come crashing back down to earth? Why is the stock that you paid $100 a share for now trading at $39? These are questions that many novice traders and investors may be struggling with in the wake of the most recent market correction. Momentum stocks have been hit hard as the Nasdaq 100 and Russell 2000 indices have moved lower in recent weeks. Caught unaware by the recent slide, some traders may be wondering when their beaten-down stocks will snap back and allow them to exit with smaller losses (or even reach the mythical "break even" point).  While growth stocks still firmly within their uptrends may form constructive technical bases and move higher after this correction, others may experience sharper pullbacks or break down into full "stage 4" declines (see chart below...

How to "Pull the Trigger" on Your Trading Ideas

In our last post, I quoted hedge fund manager, Jim Leitner on the importance of following up on your investment ideas.  Today I'd like to follow up and share some thoughts on how you can learn to consistently "pull the trigger" on your best trading setups and investing ideas. In order to help you do that, we'll take from the best and offer up key insights from interviews with top traders and trading psychologists like Alan Farley, Brett Steenbarger, and Doug Hirschhorn .  Now before we get to their key insights on overcoming trading anxiety and pulling the trigger on your trading ideas, let's remember what Jim Leitner said in his interview: "Learn to love to listen to people and when you hear something interesting, follow up on it. Don't just think, "Well that's an interesting idea" only to find out a year later that the company you could've bought shares in is now up 500-fold. You never want to say woulda, coulda, shoulda...