Wise’s ambitions of a sky-high New York valuation suffered a setback yesterday as shares in the British fintech firm tanked after it missed profit forecasts.
The stock fell as much as 11 per cent when it reported that earnings came in at £362million in the three months to June – an 11 per cent increase on the previous year but below analyst expectations of £372million.
The London firm last month dealt the UK tech sector a major blow when it revealed plans to move its primary stock market listing from London to Wall Street in search of a higher valuation.
Chief executive Kristo Kaarmann yesterday said that the proposed move had been ‘positively received’ by shareholders.
But the trading update and share price decline raised questions about Wise’s ability to attract a higher price in the US.
Dan Coatsworth, an investment analyst at AJ Bell, said: ‘It’s a myth that switching a main stock listing from the UK to the US will automatically result in a higher valuation.
‘There are plenty of examples where this hasn’t happened. Wise’s earnings miss is the last thing it needs ahead of a listing transition.
‘It hurts the company’s reputation and makes prospective investors more cautious and potentially less willing to pay a high multiple of earnings for the stock, even though it is still delivering high levels of customer and earnings growth.
‘It’s like asking a driver if they want to buy a sports car with a dent in it.’ Shares recovered some losses and ended down 5.7 per cent or 65p, at 1067p.
It is the latest setback for the fintech darling after Kaarmann was last year fined £350,000 by the City watchdog over ‘significant tax issues’ for his failure to pay £720,425 in capital gains tax after selling £10million worth of shares in 2017.
The New York move has been described as a ‘hammer blow’ to the City which has suffered a mass exodus.
Last month Kaarmann acknowledged efforts to reform Britain’s listing rules but he said the switch was due to the US having the world’s biggest capital markets which will allow more investors to buy shares.
The money transfer company insisted it was not turning its back on the UK, where a fifth of staff are based, and would continue hiring and investing in the country.
It will also maintain a secondary listing in London.
Posting Komentar