British fintech company Wise – formerly known as TransferWise – recently said it would move its main listing to the United States. This decisive action is sure to have a major effect on the London Stock Exchange (LSE). The news was included in Wise’s full-year earnings announcement, made public Thursday.
Wise, known for its international money transfers, is retaining a secondary London listing. While it does that, it is establishing its new primary listing home in the U.S. Wise’s dual listing strategy means its shares can be traded simultaneously on a U.S. stock exchange and the LSE. This strategy immensely increases Wise’s potential market reach.
More and more, companies are moving their primary listings upmarket in search of greater visibility. These advances provide a wealth of new investment opportunities in the U.S. market. And by creating a main listing in the U.S., Wise hopes to pull in a wider pool of investors. This move will significantly increase its potential for financial growth.
“This would allow Wise’s shares to trade on both a US stock exchange and the LSE,” said a spokesperson from Wise, highlighting the benefits of such a move.
The potential ramifications of this backdoor move are monumental for the LSE, which has been under pressure from fierce competition from other exchanges around the world. As more startups choose to list in the U.S. the storm clouds over London’s market are getting darker.
Investors and analysts have their eyes glued on this transition. It might indicate a change in how British fintech companies will plan their listings going forward. The announcement is likely to prompt other companies to begin pursuing parallel strategies as they respond to the rapidly changing state of play in global capital markets.