Death to the bucket shops –now private investors can do the discounted placings themselves: AIM Revolution starts TODAY!
BY TOM WINNIFRITH | FRIDAY 15 AUGUST 2014

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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.

A revolution on AIM starts today. The days when small AIM stocks could only raise money at a huge discount with private investors excluded and screwed are now over thanks to a new platform PrimaryBid.com which is going live right now – this will screw lazy City corporate brokers and – hopefully – put the bucket shops to the sword by allowing private investors to directly offer funding to AIM stocks. Let me explain, this is revolutionary and brilliant

The system now is that if a company on AIM is valued at £50 million or less and wants to raise money it asks its retained broker to put calls in. The only folks who play this game are bucket shops. The broker says “the stock is 10p we want to raise a million are you in at 7p.” After 10-15 calls the broker has his money.

Before the paperwork completes at least one of the bucket shops cannot resist making a few illegal profits and forward sells his stock. The shares drop to 9p and the placing is then repriced at 6p. The bucket shops who have not forward sold call their clients – who are retail investors with a desire to be sweet-talked into doing their conkers - and say “ stock x is trading at 8p-10p – I can get you some to BUY at 8p – bargain! The mug punters sign up.

The bucket shop has thus made a 33% return on his capital in 1 day. By the time the retail investor gets his stock the placing is announced and the shares are back at 7p-9p. He has lost money. A couple panic and the shares then fall to 6p-7p.The retained broker to the PLC has made £50,000 commission on the £1 million raised for making 15 phone calls which last 5 minutes each – these placings are all about price. The PLC has seen its share price smashed by 35%.

In short the winners are the crony capitalists – the bucket shops and retained PLC brokers in the City. Everyone else loses. The system stinks. FCA authorised Primarybid.com changes this all and will hopefully put every single crony capitalist out of business for good!

Here is how it works – you sign up HERE (it’s free no obligation etc.)

If you like a given stock any stock and the spread is 9p-10p you place a bid – which you can withdraw at any time - saying you will buy anything form £500 upwards at whatever price you fancy. It could be 9p it could be 1p.

When Primarybid has a reasonable amount on offer for that company it will go to the company and say “you can have £100,000 at 9p, £200,000 at 8.5p, £500,000 at 1p whatever the sums are. The company can decline all offers or it can accept whichever amount at whichever price it wishes.

The odds are that it this fund raise will be at a far smaller discount than would be the case at present, it will be private investors participating in the placing and the company will be charged far less than 5% by Primarybid.com.

So the company gets to raise cash at a lower cost and a smaller discount. It wins.

And private investors get to take part in all the placings cutting out the bucket shops and retained brokers so they win.

This is sort of crowdfunding on Aim and it is brilliant. It brings private investors onto the same playing field as the City and it helps companies too. It cuts out the crony capitalists.

Primarybid.com is the brainchild of Darwin Strategic which used to be big in death spirals but has seen the light. I have been working with its boss, the charming Anand on this idea for a while & will earn a few quid from it but I support it because it is brilliant. It deals with crony capitalists and empowers private investors. I really believe this is a way to start transforming AIM

This will only work if Primarybid.com gets a critical mass of private investors playing but it can revolutionise and start to clean up AIM. So do not hold back – sign up TODAY and get anyone you know to sign up today with Primarybid HERE

http://www.shareprophets.advfn.com/views/7208/death-to-the-bucket-shops-now-private-investors-can-do-the-discounted-placings-themselves-aim-revolution-starts-today



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