Stocks plummet in Wise ahead of transition to primary stock exchange listing in the United States
In a strategic move aimed at enhancing its growth and market presence, the fintech firm Wise has announced plans to shift its primary listing from London to New York. The decision comes as the company seeks to capitalise on larger market opportunities, improve its financial and operational positioning, and enhance investor access.
The U.S. represents the largest market opportunity for Wise, offering a vast consumer base and extensive banking network. By listing in New York, Wise aims to tap into this potential, providing better access to the world's most liquid capital markets.
The shift is expected to improve liquidity and expand investor access, particularly for U.S.-based institutional and retail investors who currently face difficulties in purchasing Wise's stock. A dual listing is also predicted to boost visibility and could lead to inclusion in major U.S. indices, further enhancing Wise's global presence and appeal to a broader investor base.
Despite the shift in listing, Wise emphasizes its commitment to maintaining a significant presence in London, ensuring that the operational aspects of the business remain largely unchanged.
In other news, Wise recently reported a 24% rise in quarterly cross-border volume to £41.2bn, a 12 basis point drop in cross-border take rate, and a 31% growth in customer holdings to £22.9bn. The firm's active customer base also rose 17% to 9.8m.
Philip Atkinson, Analyst at Third Bridge, stated that cross-border volume, take-rate, and card & other revenue came in below consensus estimations. The consensus miss on overall volume implies that the market could be factoring in platforms volume, with the overall miss potentially showing a slower ramp to this long-term revenue driver than previously expected.
Wise has also recently launched Wise Business in the Philippines and formed partnerships with Raiffeisen Bank and UniCredit. However, the move to New York has renewed concerns over the health of the UK's capital markets, with Lee Edwards, VP at analytics platform Amplitude, stating that the UK urgently needs to rethink its support for tech ecosystems.
The decision marks one of the biggest exits in recent months, signalling a need for a competitive public markets environment and the right incentives in the UK. Wise shares fell as much as 9% per cent to 1033p in early London trade.
[1] Source: Wise Press Release, 2021 [2] Source: Financial Times, 2021 [3] Source: Reuters, 2021
The strategic move by Wise to list in New York will allow the fintech firm to access the largest capital markets globally, thereby aiding its business expansion and financial growth. With the shift, Wise aims to capitalize on technology advancements in the U.S. finance sector, ultimately positioning the company for a broader global reach.
