London’s stock market got a welcome boost on Tuesday after shares in Raspberry Pi jumped a third in early morning trading as the affordable computer supplier began life as a public company.
Raspberry Pi's shares soared over 390p in early trading, well above its initial price offering of 280p, which was announced prior to markets opening.
Trading is currently only open to certain institutional shareholders with full trading to include retail investors to begin on 14 June.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The IPO terms pointed to a valuation of almost £550 million, the firm said in a stock market update. Raspberry Pi said the listing would raise £166 million.
The IPO has been cited as a victory for the London market, which has suffered from a number of UK-listed firms being bought out or moving abroad.
Paddy Power-owner Flutter, for example, has shifted its main stock market listing to New York, while German-owned Tui signed off a plan to delist from London in February.
A preference for New York
Before Raspberry Pi’s IPO, London’s stock market has struggled to attract interest from high-growth technology firms, which have shown a preference to list in New York. Indeed, the London Stock Exchange lost out to the US last year when UK chip maker Arm Holdings chose Wall Street over London for its stock market return.
Eben Upton, chief executive of Raspberry Pi, said: "The quality of the interactions during the marketing process has underlined our belief that London has the right calibre and sophistication of investor to support growing, ambitious technology businesses such as Raspberry Pi.
"The reaction that we have received is a reflection of the world-class team that we have assembled and the strength of the loyal community with whom we have grown."
Lack of UK technology stocks
The listing comes after fund management veteran Nick Train, manager of the UK-focused Finsbury Growth & Income Trust, recently apologised for the “poor” performance of his portfolio in which he blamed a lack of exposure to technology companies.
The Finsbury Growth & Income Trust is just one example of UK-focused portfolios that have struggled in recent years due to a lack of technology stocks listed in London compared with the rise of the Magnificent 7 across the pond in the US.
The investment trust had a share price total return of 2.7% in the six months to 31 March 2024 compared with 6.9% in the FTSE All Share Index.
Raspberry Pi’s IPO also comes amid reports that Chinese fast-fashion giant Shein is preparing to file for a listing in London.
According to Sky’s reporting, the London Stock Exchange flotation Shein is seeking would value the company at around £50bn. The huge sums involved could make it the biggest IPO ever to take place in London, with the current record held by the 2011 valuation of trading and mining giant Glencore International (£36.34bn).
-
Revolut finally bags a UK banking licence – what next for the challenger?Revolut has finally been granted a UK banking licence following three years of negotiations with the regulator
-
Could Labour impose a “double death tax” of more than 50%?Speculation is mounting that capital gains tax will be reformed in the Budget - and one option is to charge bereaved families the tax on top of inheritance tax. We explain how it could work
