UK 15:25 Monday, 26 October 2026
Breaking news and expert analysis on fast-moving AIM and LSE listed shares
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
In the wake of proposed changes to AIM Rules regarding investment companies and cash shells (see HERE and HERE) I am drawn to an announcement on Friday afternoon from ISDX Growth Market-listed Chalkstream (CHLK). It has announced plans to end its life as an investment company after two and a half years – and no investment. Let us compare that to the AIM-China Filthy Forty member that is Northwest Investment Group (NWIG) which has spent about five years on the Casino – and has also not invested a single penny.
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Comments
wildrides
Pretty shocking stuff ……….. just goes to show investment companies are folly . Just invest direct and cut out the middle man . Okay if they are not listed then you cant ……… but if it cant get a listing it will be shite anyway . Most of the time your just chucking money down a bottomless pit with no control . AFRI being a prime example . The fantasy “tucking” business it is supposed to be invested in is not required to give AFRI any management info . Thus share holders are almost always in the dark as to operational progress . Its all down to wether or not you trust Del Boy Lemongas . That , for most people , is a colossal ask these days . Aim should rule that “all investment companies should be 50% invested by the end of year one or return all funds to share holders , including directors compensation, but excluding listing , legal , and other regulatory admin costs” Directors not getting paid if they make no investment by one year into the project should focus the mind some what on the task in hand.
Nigel Somerville
Wild – well, sort of. But the big point here is that it is exactly those listing/legal and other regulatory admin costs which are screwing the shareholders in the case of NWIG and, by extension, other AIM investment companies’ shareholders. There are other ones which do invest – dare I say Tern (which I’ve not had a good word to say about) might actually class as a success in that regard.
The thing is that compared to AIM, ISDX appears to offer far greater protection – and lower costs too, if the above companies are anything like typical.
AIM is known to be unhappy about the number of investment companies on its books, and also about the number of corporate failures being restructured into subscale investment companies. But there are also too many which then do nothing with the cash and it all goes on corporate costs. Requiring more cash at IPO does nothing to change that – they need a time limit. As for the restructured cash shells, I think they too should have some kind of asset test. All they have to demonstrate at the moment is that they can keep the lights on to year end. But at least they’re limited to six months in the proposals.
There are examples of very good investment companies and investment trusts – many offer cheap way of getting a spread of investments and the expertise of a decent fund manager. There are also, dare I say it, some very strong VCTs. So there is a case to be made for getting a middle man.