Wise shares tumble ahead of switch to US primary listing
Wise shares sunk on Thursday morning after the London fintech disappointed analysts in a trading update ahead of its upcoming switch to a US primary listing.
The £12bn money transfer business reported a 24 per cent rise in quarterly cross-border volume to £41.2bn in the three months to end June, while customer holdings grew by 31 per cent to £22.9bn. The firm said its active customer base rose 17 per cent to 9.8m. Underlying income was up 11 per cent to £362m.
However, Wise’s cross-border take rate fell by 12 basis points in the first six months of the year, which the firm said reflected a reduction in its average price.
“We have had a strong start to our financial year, progressing on our journey to moving trillions with more people and businesses around the world using Wise,” CEO of co-founder Kristo Käärmann said.
Wise shares fell as much as nine per cent per cent to 1033p in early London trade. The stock is now down three per cent since the start of the year.
Philip Atkinson, Analyst at Third Bridge said: “Crossborder volume, take-rate, and card & other revenue all came in below consensus estimations this morning. From what our experts have been saying, take-rate reduction and slower card growth shouldn’t come as a surprise.
“The consensus miss on overall volume, despite a beat on the two line items, personal and business, implies that the market could be factoring in platforms volume, with the overall miss potentially showing a slower ramp to this long-term revenue driver than previously expected.”
Wise plots move to the US
The fintech sent a devastating blow to the London Stock Exchange last month after it unveiled plans to shift its primary listing to New York, marking one of the biggest exits in months and renewing concerns over the health of the UK’s capital markets.
Read more: A Wise storm has rocked the London Stock Exchange’s fintech dream
Lee Edwards, VP at analytics platform Amplitude, said Wise’s departure was the “latest sign that the UK urgently needs to rethink how it supports and scales its tech ecosystem. London has incredible talent and ambition, but too often lacks the depth of capital markets, investor appetite, and scale-up support that founders find in New York.
“Without a competitive public markets environment and the right incentives to keep innovation here, we risk becoming a stepping stone rather than a destination.”
“We believe the addition of a primary US listing will help us accelerate our journey to becoming ‘the’ network for the world’s money, and ensure our mission and the interests of our customers and Owners remain deeply aligned over the long term,” Käärmann said on Thursday.
The fintech recently launched Wise Business in the Philippines and unveiled partnerships with Austrian Raiffeisen Bank, followed by UniCredit in July.