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Record London Direct Listing Values Wise At $11 Billion

Record London Direct Listing Values Wise At $11 Billion
The stock price of London's largest ever tech listing, that of the financial technology company Wise, ended the first day of trading at a 10 per cent rise and according to analysts, the success of this listing could also encourage other companies seeking to go public without the help of underwriters.
Attracting technology companies to get listed in the country is being pushed by Britain's government and the financial watchdog of the country outlined proposals to make it easier for them to get listed earlier this week. The aim of the move is to make London capable to compete with New York and the European Union.
The shares of Wise opened at 800 pence which were in line with an auction process in the preceding hours, in which the indicated price range was of 750-820 pence as the group completed the first direct listing on the London Stock Exchange (LSE). The stocks closed at 880 pence which put the market valuation of the company at 8.75 billion pounds ($11 billion). This also made Wise the largest tech company of London by market capitalisation which was well over the $6-$7 billion that the market had expected it to be earlier this year.
The current year has been a record breaking one for London listings and the strong result of Wise was right at the top. According to analysts, this successful listing could also influence other fast-growing British companies in its financial technology sector to get listed. ,
"The unruffled start to trading should help London’s efforts to maintain its reputation as a Fin Tech hub as it has struggled to attract fast growing companies keen to list," said Susannah Streeter, an analyst at Hargreaves Lansdowne.
"But now more firms might see direct listings as a good alternative to traditional IPOs which are more costly, needing the input of expensive services from investment banks," Streeter added.
This direct listing was launched last month by Wise, a cross-border payments company which is one of Britain's most well-known fintech unicorns. Direct listing allows companies to get publicly listed without the need for making a public offering of shares.
This mode of going public is gaining popularity among United States based technology companies such as Coinbase, Roblox and Spotify.
The initial public offerings (IPO) in London this year has already reached a record high – driven by public listings kin London of a number of tech companies including Deliveroo Trustpilot and Moonpig.
"It's definitely helpful to have well-known brands with strong success stories on domestic markets. They are few and far between so far, but the more that come to market the better," said Daniel Turgel, a partner in the M&A and corporate practice at White & Case.
Dan Thomas, an analyst at Third Bridge, said that unlike its peers in cross border money transfer such as Western Union, Wise does not actually wire money but rather it holds balances in countries on popular currency routes to sidestep high fees, said Dan Thomas, an analyst at Third Bridge.
"Wise has a distinct advantage over peers like Western Union and Moneygram because origination is 100% digital and they don’t have to maintain a network of physical locations to disburse cash," he said.

Christopher J. Mitchell

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