The London Stock Exchange's AIM experiment: Regulatory or market failure? A discussion of Gerakos, Lang and Maffett

The conference paper by Gerakos, Lang and Maffett (2013) provides reliable, descriptive evidence on the post-IPO performance of firms listing on the London Stock Exchange's Alternative Investment Market (AIM). Their findings are consistent with both a failure of private sector regulation and incorrect market expectations about AIM's investor protections. In this discussion of Gerakos et al. (2013), I highlight the strengths and limitations of their conference paper, summarize how various regulatory and market factors could produce the observed systematic under-performance of AIM offerings, and outline paths for future research on the topic.