Redknee public on AIM

Redknee has NO offices in the United States. Really. Look here at their info page. And now they have chosen to go public on the Alternative Investment Market (AIM) of the London Stock Exchange.

While liquidity is not as good on the AIM as on NASDAQ, it is easy to understand why Redknee (AIM : RKN) would make this decision in just two words -- Sarbannes Oxley. As ThinkBlog points out:

SOX compliance can easily cost $2 million for a small, emerging growth company.

I think that number is on the low side. When I was an executive officer at Borland we estimated that Sarbannes Oxley was costing us $1 million per quarter when you took into account lost time from employees and executives due to compliance issues.

ThinkBlog explains a few more of the benefits:

Besides escaping SOX and other choking US regulations, AIM gives listing companies other benefits as well. In general, it takes 12-16 weeks to get listed on AIM as opposed to the typical 4-6 months in the US. Listing fees are 1/3 or less of what they are on the NYSE or NASDAQ.

Reporting requirements are 2x a year as opposed to 4x, and shareholders aren't required to approve most actions.

I suspect we will be seeing a lot more companies choosing AIM over NASDAQ... and maybe avoiding a US office altogether. At least until we can recover from the abuses of the few and reinstate rational business practices here in the Stats.