This is a strong question and the intention is to demonstrate the validity of the question.

LSE-Aim has around 1,000 listed companies, around 70% of which have a market capitalisation of less than £50 million. Most institutions set a £50 million+ market capitalisation requirement before they will invest in small cap companies. Therefore, this defines the investment audience for most LSE-AIM companies as private investors, most likely execution only investors using their private funds and SIPP monies.

Why do LSE-AIM companies that sit in the category above then employ financial PR companies who are not a regulatory requirement of the exchange and in doing so, what remit do they give them? What do they hope the PR Company will deliver to them? What resources, time and execution abilities do these PR firms have to deliver real education and share price value to the private investor? What do they do to increase the market capitalisation and shareholder base for their client companies? As far as I can see, they fail on every level. Companies then replace them with another example of the same, the pattern is repeated and more monthly fees are wasted.

It can easily be argued that the route to market for companies to attract new investors is through a niche group of information distributors, specifically, Stockopedia, Proactive Investors, AJ Bell Media (Share magazine) and Investors Chronicle. These outlets go straight to the private investor audience described and some have reach to the traditional press as well. Equally, they reach city trading desks and as well as the written word, they deliver on investor evenings and more importantly, film which has the greatest reach of all as well as word of mouth referral, so important with private investors. Furthermore, the true value of film is that you see the information delivered directly from the principles of companies which in effect means it is indisputable, so noise on bulletin boards and social media to the contrary, can easily be ignored.

A financial PR firm is “permission based PR”. That is to say they do not own any of these distribution channels or press and magazine publications and therefore they need to seek the permission of the relevant publisher to deliver their story. With 1,000 companies all vying for a small amount of press print coverage, there will be more losers than winners in this department which…

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