Monkey tries AIM

Even more banana

People not understand AIM stock price movement.

Me explain.

There is global stock market.

In London, there is market called AIM. Alternative Investment Market. Very serious name. Imply there is investment happening. Imply there is market.

Both implication wrong.

AIM is place where small company go to raise money. Company have idea.

Sometimes idea is good.

Sometimes idea is 'blockchain but for sheep.’

Monkey give money.

Company give share certificate and dream.

Beautiful.

Degenerate.

AIM company often have three things: CEO with ambitious hair, press release and PowerPoint slide that say ‘TAM: £4.7 trillion.’

They not have revenue.

Revenue for cowards.

These company trade on story. On narrative. On concept of future cash flow so distant it has own geological epoch.

Analyst write note. Note say ‘speculative buy.’ Note also say ‘may lose entire investment.’

Both true.

Only second one matter.

Retail monkey read headline. Monkey see number go up. Monkey buy.

Monkey does not read footnote.

Footnote say company has 6 months of cash runway and two customers, one of which is CEO’s brother-in-law.

There is also NOMAD. Nominated Adviser. Very official title. NOMAD is supposed to make sure company suitable for market. Suitable mean: not obviously fraud.

NOMAD also paid by company.

You see problem.

NOMAD look at business plan. Business plan say ‘disrupting £4.7 trillion market.’ NOMAD nod. NOMAD collect fee. NOMAD move on. NOMAD has eleven other clients also disrupting trillion-pound markets. Very busy. No time for doubt.

Now something happen in 2022.

Interest rates go up.

This mean money have price again.

Before, money free. Practically raining. You throw story at monkey, monkey throw money back. No need for profit. No need for plan beyond ‘scale aggressively and figure out unit economics later.’

Later is now.

Monkey, who been sitting on pile of AIM shares and telling wife it ‘long-term strategic portfolio,’ begin doing maths.

Maths not looking good.

Company burn cash every quarter. Company keep saying ‘path to profitability.’ Path keep getting longer. Path now apparently go through several countries that do not exist yet.

But monkey still hold. Because selling mean admitting.

Monkey not admit.

Monkey post in forum instead. Forum full of other monkey who also not admit. They call each other ‘diamond hands.’ They share old press release as if new. They say ‘this is accumulation phase.’

This not accumulation phase.

This slow-motion disaster with good branding.

Meanwhile, company keep issuing shares.

Cannot pay staff? Issue shares.

Cannot pay supplier? Issue shares.

CEO need new Range Rover for ‘client entertainment purposes’? Issue shares.

Each new share quietly murder value of old share. Dilution. Death by thousand fundraising rounds, each at a discount to market, each described in RNS as ‘pleased to announce placing for exciting strategic opportunity.’

Monkey CEO pleased, Disney holiday sorted.

Monkey shareholder cry inside.

Company put out update. Update say revenue ‘slightly below expectations.’

Expectations had been carefully managed to be very low.

Revenue still below them.

Share price fall 34% in one day.

Forum monkey confused. Monkey say ‘but fundamentals strong.’ Monkey calculate price-to-sales ratio and find it very reasonable if you assume sales will one day exist.

City monkey has already left building.

City monkey shorted it two weeks ago when told CFO had quietly resigned to ‘pursue other interests.’

Pursuing other interests mean: getting out before it becomes a crime scene.

Retail monkey find out about CFO three days later. Too late.

Liquidation begin. Bid-offer spread widen to point where it more expensive to sell than to frame share certificate and hang it in downstairs toilet as reminder.

Broker send email. Email is polite. Email say position has been ‘marked to market.’

Market has spoken.

Retail monkey, who been averaging down since October 2019, finally sell.

At 63% loss.

Then read announcement, posted 12 minutes later, that company has secured ‘transformational contract’ worth £25.3 million.

Share price triple.

Monkey scream.

This is AIM.

City monkey?

City monkey already in next trade.

Retail monkey open Telegram.

New group say: ‘AIM MOVERS: UP 400% TODAY — IS THIS THE NEXT MULTI-BAGGER?’

Monkey click.

Of course monkey click.

Monkey always click.

Different company.

Same PowerPoint. Same ‘path to profitability.’

Same CEO.

CEO done this four times. Each time, company fail. Each time, CEO raise new money.

Every time, CEO take salary.

Take bonus.

Take options.

CEO not failing.

Monkey failing.

CEO is product, working as designed.

This why monkey never learn.

Biggest problem?

Sometime AIM work.

Sometime small company with bad PowerPoint become real company with real revenue. Sometime monkey who buy in 2015 and hold through dilution and despair and three ‘slightly below expectations’ updates, make actual profit.

This is trap within trap.

If AIM only produce disaster, monkey stop clicking. Monkey learn.

But AIM produce enough miracle to keep hope alive. Just enough ten-bagger to fill Telegram group.

CEO with transformational vision and CEO with fourth failed company look same in press release.

They have same hair.

Monkey cannot tell which to trust.

Neither can NOMAD.

But if you can, riches to be made.

Welcome to AIM.

It bananas.