If you believe the naysayers, the London stock market is finished as a modern home to growth companies.
We don’t back risk-takers, we don’t “get” big tech. We’re dinosaurs.
There is no doubt the move by Arm Holdings to head to New York rather than London is a shame, but perhaps it was inevitable.
Bankers might think that the Government should have wooed Arm’s owners SoftBank more than they did, but it seems they gave it a fair go.
This week CRH said it would move its primary listing to the US too. There is more liquidity there and higher stock valuations. But that could just mean US shares are overpriced, that the market is frothy.
Recent London tech floats have not exactly gone well. Deliveroo shares are down 70% since floating. Is that because London doesn’t understand technology or because the company has been found out?
Securing high prices on flotations is good for founders and bankers, but not necessarily a great thing for anyone else.
Like expensive footballers, it gives companies a value they have to live up to. They have to score constantly to make the price tag seem worth it.
Better that a company floats cheaply and grows steadily over many decades.
The City of London isn’t, or shouldn’t, be about the rapid enrichment of a small few. Its aim is for all of us to get richer, slowly.
The thing is, if it is really true that London shares are unloved and therefore underpriced, there is a very simple and profitable solution: buy some.
