Arm shares fall below their list price as New York’s shine fades
Arm shares fell below their listing price in New York last night as the head of the London Stock Exchange dismissed criticism that the city is losing its status as a leading financial centre.
After City declined to list on the Nasdaq, the British chip designer’s shares rose to $65 on their debut.
But they fell for five days in a row, falling below the $51 offering price yesterday as enthusiasm for the listing faded.
The collapse has raised questions about the narrative that New York is a better choice than London for a 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: After the City rejected its Nasdaq listing, Arm’s shares rose to $65 on their debut (pictured) – but have fallen five days in a row since then
“Anything that is seen as a negative comment about London as a financial center has become a kind of clickbait,” he said. “I think this narrative is exaggerated.
“London is a fantastic international financial center.” Speaking to the Financial Times, he added that the LSE was “by far the leading European stock exchange.”
Arm chose New York over London to secure a higher valuation, making it the latest in a series of companies that have chosen to go public or move their listing there.
This month, packaging giant Smurfit Kappa announced it would move its premium listing from London to New York as part of a merger with US firm WestRock, thereby delisting from the FTSE 100 index.
Meanwhile, construction supplier CRH has announced plans to move its main listing from London to New York.
Plumbing supplier Ferguson moved its listing to the US last year. Interactive Investor’s Victoria Scholar said: “London remains a source of rock-solid companies,” but added that New York could command higher valuations.
However, other recent listings in New York this week followed a similar pattern to Arm. Instacart, a US grocery delivery company, listed its shares at $30 and rose to over $37 before falling back.
Shares of software group Klaviyo rose 23 percent after trading at $30, but gave back most of their gains.
The drop in Arm shares came as the industry lost some of its luster following a dramatic rise in Nvidia shares this year.
Nvidia, which previously tried to buy Arm and is a major investor, more than tripled in value between January and earlier this month but has since fallen 15 percent.
King Lip, chief investment strategist at Baker Avenue Wealth Management, said: “A lot of these chip names have gotten this AI boost. “Some of that passion has faded.”