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Take Aim! The 'hit or bust' review of London's junior market

All but two of the 20 biggest risers this year were Aim stocks,and all but two of the biggest fallers were also listed on Aim.

Snoozebox units
If you invested your life savings in Snoozebox, you could soon be living in temporary accommodation

Who in their right mind would have put money on Leicester City to win the Premiership at the start of last season?

Possibly the same group that took a punt on SolGold plc (LON:SOLG), the owner of the Cascabel copper-gold project in Ecuador.

Shutting the Ecuador on BHP

The project attracted the attention of mining titan BHP Billiton plc (LON:BLT), which offered US$30mln to take a 10% equity stake in the AIM-quoted mine developer, and proposed to spend US$275mln on the project in order to earn 70% of the project.

It wasn’t a good enough offer according to SolGold’s board, which previously had backed a proposal from Newcrest Mining and Maxit Capital that would see it receive US$33mln in return for just over 14% of the company, at an equivalent price of 16 US cents per share.

That was six cents less per share than BHP's offer, but as mining specialist broker SP Angel noted: “The BHP proposal would give SolGold less money albeit at a better price.”

The shares started the year at around 2.13p and ended it at around 23.93p, up a staggering 1,023%. Some people still think the shares have a bit further to go, with the possibility of BHP Billiton returning to the table with a better offer.

A bid from the blue

Sometimes, you wonder whether pinning a long list of company names to the wall and then throwing a dart at the list would be a better way of investing than poring over company accounts.

For example, here – in its entirety – is the chairman's statement from the December 2015 interim results from Mercom Capital PLC (LON:MCC), or Mercom Oil Sands as it was called then.

“I am pleased to present my chairman's statement for Mercom Oil Sands PLC ("the Company") for the six month period ended 30 September 2015.

“Despite the challenging environment in the resources sector, the directors continue to believe there are opportunities to create value for shareholders. The board is working to identify and evaluate potential opportunities, and will make further investments when it is satisfied that all its demanding criteria are met.”

That's it. My name's Dr Patrick Cross, you've been a wonderful audience, good night!

No real sign from that statement that the natural resources investment company would go on to climb 1,308% on the year.

It wasn't until October that the share price started kicking higher. On 5 October the company put out a statement, swearing blind it knew of no reason for the sudden upsurge in the shares.

Sixteen days later, the company announced it was in bid talks with Calvet International. If all goes according to plan, the company will change its name to Monchhichi PLC and focus on investment in established industry proven technology, media and internet businesses.

A new board is waiting in the wings, and an immediate priority of the board would be to issue 10mln shares to new investors at 30p a pop; the shares currently trade at around 28.17p.

Jersey boys

Mercom may have abandoned the oil business, but Jersey Oil and Gas PLC (LON:JOG) is still very much in the game.

It saw its shares rise 958% in 2016, after Norwegian oil giant Statoil took a 70% working interest in two of Jersey's North Sea blocks: the UK Seaward Licence P.2170 (Blocks 20/5b and 21/1d) in the UK Central North Sea.

Rapid descent for drones maker

The ticker symbol for Strat Aero PLC (LON:AERO) is Aero, but unlike the bubbly chocolate introduced to the world by Rowntree, the stock has not proved popular with investors.

The shares were practically wiped out in 2016 – down 96.6% - with the rapid descent starting in April as the unmanned aerial vehicle (Do you mean drones? - Ed.) firm filed a legal action against W. Hulsey Smith, the former chairman and chief executive of its subsidiary, Aero Kinetics.

W. Hulsey Smith, who as you can tell from the baffling and pointless inclusion of the first initial of his given name, is American, did not take kindly to being accused by Strat Aero of fraud and breach of contract, and responded by filing counter-claims against the company.

Late September saw the two parties agree a settlement, with Strat Aero dropping accusations of fraud against Smith, giving him an 11.75% stake in the company and bunging him US$75,000 in cash.

Smith also dropped his litigation against Strat Aero, and we can all go back to focusing on the commercial side of the business, rather than the legal issues.

Some times nice guys do finish last

At the risk of sounding like a London cab driver, we had that Jimmy Wales, founder of Wikipedia, in the Proactive Investors office once and he seemed like a good guy.

He's also chairman of The People's Operator PLC (LON:TPOP), the SIM-only mobile phone that eschews traditional marketing spend (preferring to spend the money on charitable causes) and relies on viral marketing.

It is fair to say that after floating on Aim in October 2014, things have not gone well, and the shares tanked 94% in 2016.

Over to Wikipedia to explain why: “The company's stock dropped nearly 90 percent in value in its first year and a half. TPO suffered reputational damage in 2016 after a transfer of customers from 3G to 4G service led to many of them waiting for weeks without phone service.”

The stock floated at 130p and towards the end of November tapped the market for £1.7mln, issuing shares at 5p a pop.


Asleep at the wheel

If Strat Aero has an enticing sounding ticker symbol, then the stock market code for Snoozebox Holdings PLC (LON:ZZZ) is both clever and memorable: ZZZ.

Unfortunately, the old adage of “you snooze, you lose” could not be more appropriate when it comes to evaluation the investment performance of the mobile accommodation provider, which among other things provides luxury "pop-up" accommodation at big events, such as Formula One motor racing meets.

The splendidly named Lorcán Ó Murchú resigned as chief executive in April, with chairman Chris Errington taking on executive duties. Ó Murchú replaced founder Robert Breare as chief executive, after he stepped down in April 2013 following mounting losses.

Errington has initiated the inevitable strategic review and encouragingly, the shares only fell 3.3% in the second half of the year, but at 0.435p a throw, they haven't much further to fall.

Quick facts: SolGold plc

Price: 22.15 GBX

Market: AIM
Market Cap: £461.63 m

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