The rare coin and stamp seller, founded in 1856 by English stamp dealer Edward Stanely Gibbons, wants to exit the UK’s Alternative Investment Market, or AIM, because of the lack of benefits of remaining listed.
The move comes just days after Abcam, the innovative Cambridge biotech firm, abandoned its AIM market listing in favour of New York’s Nasdaq, raising further questions about the ongoing allure of AIM in its current form.
Some commentators believe part of AIMs problem is an unintended attack from wider market reforms being proposed by the Financial Conduct Authority.
The regulator has submitted proposals about market reforms that include a model to make it easier for firms to list on the Main Market, leading some to believe that this will hurt the AIM market.
Corporate services firm Elemental said “any reform that makes Main Market listing requirements simpler and more competitive could surely hurt AIM”.
The AIM market saw a net 33 companies join in 2021, the first year of net growth since 2007, taking it to 852 firms. But this is well below its heyday of 1,694 companies in 2007.
But in the second quarter of this year, AIM had its lowest number of IPOs since 2009 – just one flotation - according to research by accountancy firm UHY Hacker Young.
Stanley Gibbons said the “considerable cost, management time and the legal and regulatory burden” linked to being on AIM were “disproportionate to the benefits to the company”, adding that there were “clear benefits from a financial and business perspective to terminating the listing”.
The firm stated that there were also “negative operational influences which come about directly as a result of being listed”, notably that the vast majority of its peers were private and so did not have to make as much information public as it did, putting it at a competitive disadvantage.
Its largest shareholder, pension firm Pheonix SG, warned that if the proposal, which requires 75 per cent shareholder approval, was not passed it would reconsider its financial support for the firm, which includes providing all the firm’s debt.
Stanley Gibbons first listed on AIM’s predecessor, the Unlisted Seurities Market (USM), in 1984, meaning its move to leave the bourse could be a blow for the junior market.
A negative view of the decision will be amplified by the fact Pheonix said it still believes in the long-term potential of the firm, and that the proposed exit from AIM is not because of solvency issues.
Since launching in 1995 when it replaced the USM, AIM has helped more than 3,865 companies to raise over £115 billion.
Financial firms have until 28 July to submit responses to the FCA’s Discussion Paper DP22/2.