Lighthouse is a fundamental analysis project of the IEAF aimed at the secondary equity market BME Growth.
Companies coverage report
BME Growth is the BME Exchange market for SMEs and focuses on companies in any sector of activity: technology, biotech and health, engineering, telecommunications, renewables and real estate (REITs).
BME Growth has specifically tailored regulation as well as prices and processes adapted to the characteristics of these companies. The Market has a set of Registered Advisors to help companies throughout the listing process, both as they become listed on the Market and beyond, in the day-to-day, to comply with the regulations required by the CNMV.
BME Growth also has an expanding group of qualified investors who support, trust and follow organic and inorganic growth plans presented by these companies.
BME has developed a training, coaching and networking program for growing SMEs called 'Pre-Market Environment', where companies accelerate their transformation in order to join BME Growth
In an ever more competitive business climate, continuous growth has become one of the basic objectives for companies. An effective management team should aim not only to obtain the resources required, but also to maintain a balance between equity and borrowing. A capital increase which coincides with a market flotation, or a subsequent issue, is the perfect way to obtain funds to sustain a company's expansion. BME Growth is the most appropriate way for growth companies to generate finance through equity. Listed companies often use their own shares as payment in mergers and takeovers. As there is a market for the shares, when a company is absorbed, its shareholders can choose whether to remain part of the new company or whether to sell their shares on the market at a time of their choosing.
In essence, being listed on a stock exchange allows an effective diversification of financing sources for companies and complements other sources such as traditional banking lines, bond issues, etc
Listing on BME Growth brings a company liquidity, transparency and prestige. A company which is ready to list on BME Growth has attained a high level of organisation and control. And above all, it has secured investors' confidence in its project.
This prestige is recognized by clients, suppliers and financial institutions which helps relations. BME Growth is in the news every day. Listed companies enjoy wide media coverage as investors and analysts are eager for information. This media interest boosts the company's prestige and brand and complements its other marketing and advertising efforts.
The shares of companies listed on BME Growth have a target value. In fact, share prices are shaped by supply and demand. BME Growth, and all markets in general, incorporates growth and profit forecasts, together with other external variables, into its valuations of listed companies. This feature distinguishes the prices set by the markets from those established by other means.
The simplicity of converting shares into cash is one of the main appeals of this market for shareholders and potential investors.
Shares of listed companies are a highly liquid payment instrument which can be used in financial transactions. In fact, many capital increases involving companies listed on BME Growth have not been in cash, i.e. the company's shares have been used as consideration in the acquisition of another company.
Also, companies listed on BME Growth have “liquidity providers”. This is an intermediary with whom the company or some of its core shareholders sign a liquidity contract. The liquidity provider offers sales and purchase positions during the market session to ensure constant liquidity for the stock. The objective of liquidity contracts is to guarantee transactions are liquid, ensure sufficient trading frequency and reduce fluctuations in price which are not caused by market trends.
Companies seeking admission to BME Growth must be public limited companies and satisfy some pre-requisites.
Transparency. To maintain a correct level of transparency, regulations are adapted to their needs and introduce two new figures, the Registered Advisor and the BME Growth itself.
Information reporting. The company is committed to reporting the half-yearly and annual information required by BME Growth.
Registered advisor and Liquidity provider. Appointing an Advisor helps companies both when they are joining to the market and once they are listed. While a contract with a liquidity provider helps trading.
Shareholder diffusion. In order to join BME Growth the shares held by shareholders holding less than 5% of the share capital must have an estimated value of more than €2 million. Often, companies who do not initially meet this requirement, do so later via a share placement or a share sale upon admission to the market.