AIM-listed WANdisco is the latest company to allude to a listing in the United States as the prominence of London’s equity markets is increasingly questioned.
WANdisco follows CRH’s decision last week to shift their primary listing to the United States as ARM Holdings snubs the UK in favour of a US IPO.
This morning, WANdisco released a statement in response to media speculation confirming they were ‘exploring’ a secondary listing in the United States.
WANdisco said in a statement:
“As a dual UK and US headquartered technology company, WANdisco has long-stated its intention to consider an additional listing of its ordinary shares in the United States. The company can confirm that it is in the early stages of proactively exploring this option.”
In the case of WANdisco, a US listing makes sense given their operational hub located over the pond. In the same light, CRH earns a significant proportion of their revenue from the US – core to their decision to shift to the US.
However, market participants highlight the impact of Brexit on London’s markets and the availability of capital in the US as a reason for seeking a US listing.
“It’s clear the attractiveness of the UK market has lost some appeal in recent years after the budget car crash of last year, Brexit red tape and instability at the heart of government,” said Joshua Raymond, Director at online investment platform XTB.com.
“London has long been thought of as a major financial centre and I don’t think the loss of these major firms to the US for their stock market listing changes that.”
“Stock market listings are about price stability and valuations. If firms believe they can get higher valuations in an equally reputable markets, it’s no surprise they will make that strategic move. Yet there’s no smoke without fire and both the UK government and regulator needs to take heed of these warning signs quickly if the UK is to maintain its place at the top table.”
UK-listed companies with secondary listings isn’t anything new and many companies list on other stock exchanges or OTC Market to gain access to additional capital. However, if this trend continues it may undermine London as the major financial centre described by Joshua Raymond.