Arm Shares Fall Below Their Listing Price as New York Glow Dims
Arm shares fell below their New York listing price last night as the head of the London Stock Exchange rejected criticism that the City is losing its status as a leading financial centre.
Having rejected City for a Nasdaq listing, the British chip designer’s shares soared to $65 on their debut.
But they have fallen for five days in a row and yesterday fell below the offer price of $51 as the rumor surrounding the listing dissipated.
The drop has raised questions about the narrative that New York is a better choice than London for the so-called initial public offering (IPO).
And LSE boss David Schwimmer hit back at critics who suggest the City is losing out to other markets.
Back to earth: Having snubbed the City to list on the Nasdaq, Arm shares soared to $65 on their debut (pictured), but have fallen for five straight days since.
“Anything that is seen as a negative comment on London as a financial center has become a form of click bait,” he said. ‘I think that narrative is exaggerated.
London is a fantastic international financial centre.’ Speaking to the Financial Times, he added that the LSE “is by far the leading European stock exchange.”
Arm chose New York over London in a bid to secure a higher valuation, becoming the latest in a series of companies opting to list or move their listings to the United States.
This month, packaging giant Smurfit Kappa said it would move its premium listing from London to New York as part of a merger with US firm WestRock, meaning it will leave the FTSE 100 index.
Meanwhile, construction provider CRH has announced plans to shift its main listing from London to New York.
Plumbing supplier Ferguson switched its listing to the United States last year. Interactive Investor’s Victoria Scholar said: “London remains a source of strong companies.” But she added that New York can get higher ratings.
However, other recent listings in New York have followed a similar pattern to Arm’s this week. Instacart, an American grocery delivery company, floated its shares at $30 and soared to over $37 before pulling back.
Shares in software group Klaviyo rose 23 percent after trading at $30, but gave up most of their gains.
The drop in Arm’s stock price came as some of the industry’s shine faded following a dramatic rise in Nvidia stock this year.
Nvidia, which previously tried to buy Arm and is a major investor, tripled in value between January and earlier this month, but has since retreated 15 percent.
King Lip, chief investment strategist at Baker Avenue Wealth Management, said: “A lot of these chip names got that boost from AI. Some of that fervor has calmed down.