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Fintech Wise Plc rose as it began trading via a direct listing on the London Stock Exchange, in the largest such deal ever, bolstering UK capital market ambitions for Brexit .
The money transfer company born as TransferWise opened at 800 pence, giving it a market cap of just under 8 billion pounds ($ 11 billion). That’s more than double the valuation of $ 5 billion in July 2020 Fund raising. The stock initially jumped 4% before slashing gains and was trading at 809.40 pence as of 11:30 am in London.
The company avoided a traditional initial public offering. Instead, shareholders sell a stake of at least 2.4%, after the three-hour auction. Wise will not raise new capital, while existing investors have been able to sell shares directly on the open market.
Wise founders Taavet Hinrikus, left, and Kristo Kaarmann.
“Wise’s successful direct listing is clearly a boost to London’s ambitions as a global hub for technology companies,” said Joachim Klement, strategist at Liberum Capital. “Wise is a very profitable and rapidly growing challenger to traditional banks, which is what matters to investors,” he said.
Wise follows U.S. tech companies by offering existing shareholders additional voting rights. Popularized by companies like parent company Google, Alphabet Inc. and Facebook Inc., these dual-class structures have been a sore point in the UK as they allow a select group of early stage investors to retain close control. after a list of companies.
The sale of Wise will lead to “greater acceptance of improved voting rights by more and more investors, especially growth investors,” said Gavin Launder, fund manager at Legal & General Investment Management. Still, the “limited amount of stocks available on the list means it might be a bit too high to start with,” he said.
Structure
A successful listing strengthens UK government plans to allow dual class ownership of shares on the top tier of the LSE, where they are currently prohibited. The proposed change is part of a larger effort to facilitate the IPO of companies in London.
Last week Chancellor of the Exchequer Rishi Sunak pledged to make London “the most advanced and exciting financial services center in the world”.
Photographer: Kiyoshi Ota / Bloomberg
Wise, who counts Silicon Valley billionaire Peter Thiel, Andreessen Horowitz and Britain’s Baillie Gifford among its early investors, considered signing up in the US “but London was the choice,” CFO Matt Briers said in an interview in June. “London is a great place to access global capital, and it’s also a great place to make a direct list, a little-known secret we’re about to blow up.”
The pop of Wise’s first day brings some solace to London, where top new stocks such as food delivery startup Deliveroo Plc and semiconductor tech company Alphawave IP Group Plc have had commercial debuts. disappointing.
This is “a watershed moment for London,” said Alasdair Haynes, managing director of Aquis Exchange, a stock exchange platform. “While one deal is not enough for a city, innovative deals like this will help make the UK a global hub capable of competing with the US. “
– With the help of Silla Brush
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