Andrew Hore

What happens to share prices when companies leave AIM?

What happens to share prices when companies leave AIM?
With Sirius Minerals leaving AIM soon, former AIM writer of the year Andrew Hore examines whether moving to the Main Market is such a good move.
Both LSE:GVC:GVC and LSE:PAYS:Paysafe left the Alternative Investment Market (AIM) because large acquisitions meant they had to promise the backers of the deals that they would subsequently move to the Main Market. 
GVC and Paysafe are still two of the most attractive companies on this list with the potential for growth and strong cash generation.
Another company that continues to do well is window and door components manufacturer LSE:TYMN:Tyman. This is an international business that is not dependent on the UK and it still has benefits to come from the integration of acquisitions and cost saving measures. 
Moving 
There appears little correlation between moving to the Main Market and getting a better share price. When it comes down to it, the performance of the company is the only thing that has a real effect.
Retailer LSE:BON:Bonmarche would have slumped on the back of profit warnings whichever market it was on. 
It may even have been the higher profile some of these companies had when they were relatively large on AIM that helped them to gain investor interest, whereas they got lost amongst the larger Main Market companies. 
The most persuasive reason for AIM companies to move to the Main Market is to undertake a larger fundraising than they can succeed with on the junior market. The access to a wider range of investors is useful if it is required. 
Last month LSE:SXX:Sirius Minerals announced its plans to move from AIM to the Main Market. More than 180 companies have already made the move and 19 have done so in the past four years. 
Although the original idea for AIM was to provide a way of enabling companies to grow and build up track records so that they could move to the Main Market, there has been a greater number of companies that have moved the other way.
In fact, some of those companies are ones that have returned to AIM following a previous move to the Main Market. 

With Sirius Minerals leaving AIM soon, former AIM writer of the year Andrew Hore examines whether moving to the Main Market is such a good move.

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