FEW investors noticed when OmniMedia, an 18-month-old hi-tech company, made its bow at the start of this month on the Stock Exchange's Rule 4.2 matched-bargain facility for lightly traded shares. But OmniMedia could well be one of the first stars of the Alternative Investment Market, which the exchange wants to launch next June.
"It is probably typical of the sort of company that will go on AIM," said Tiki Yates of Raphael Zorn Hemsley, OmniMedia's stockbroker. "It has plans to expand and among its shareholders are some major institutions who would not have contemplated investing in a company like this a few years ago. It is entirely appropriate for a move upstairs."
OmniMedia, based in Kingston-upon-Thames, makes interactive video CDs that you can play on television or personal computer.
"We won't need a lot of capital," explained Leslie Kent, an OmniMedia director, "but we have got business in Los Angeles and Japan, and we might look to the new market if we were to find increasing demand from those quarters."
Nevertheless, the company has only a year's accounts to show, in which it made pre-tax profits of just pounds 24,000 on sales of pounds 191,000. Mr Kent and one of his co-directors, Timothy Rosen, each have three-year contracts worth pounds 144,000 annually from this year plus bonuses.
This is plainly a high-risk and potentially high-reward investment, which a few years ago would have had to go to the venture capital industry for finance before eventually being floated on either the Unlisted Securities Market or the Official List.
But new European Union directives mean that the USM has to be wound up in 1996. This will leave a gap as, since Britain left the European exchange rate mechanism in 1992, investors have recovered their appetite for shares in small companies.
Now this appetite is to be met by the Alternative Investment Market (AIM), on which the Stock Exchange published a consultative document last week. This is a key element in the seven-point plain unveiled in April by Michael Lawrence, the exchange's chief executive, to promote the interests of smaller companies through a programme of education and promotion.
AIM will build on the Rule 4.2 facility, requiring no trading record from companies but insisting on a prospectus and a member firm promising to support dealing in the shares.
It will be up to the company's directors to ensure that their documents are accurate and that they keep the market informed of significant developments. Surveillance and supervision of trading will be the same as for the Official List.
Nevertheless, the history of the USM and the short-lived Third Market suggests that AIM will have more than its fair share of disasters. The danger then is that the new market will reinforce the tabloid image of the Stock Exchange as a casino, with huge fortunes being won and lost apparently on the turn of a coin.
Since it began in November 1980, the USM has raised pounds 4bn of new money for the 881 companies that have been admitted to the market, of which 253 have since moved up to the Official List.
But, as our chart shows, the USM's overall performance has been dismal. The Datastream USM index is back to precisely the position it started, having never risen by more than 50 per cent above its starting point. In the same period, the boring old blue chips that make up the FT- SE 100 index have grown four and a half times.
The comparison is distorted in two ways. The best companies have continually left the USM to graduate to the full list, including such winners as Body Shop International, Carlton Communications and Central Independent Television.
Meanwhile, the laggards of the FT-SE 100 are periodically weeded out and replaced with more promising material. On Thursday, for instance, NFC and Coats Viyella were dropped in favour of …