The British fintech company Wise has announced that it's hitting the American market on Nasdaq, aiming to attract more investors and boost the liquidity of its shares thanks to being listed on the largest stock market — the USA, as noted by Bloomberg.
Details
According to regulatory documents, the company's shares will be trading on Nasdaq under the ticker WSE. The company will also conduct a relisting of its shares on the London Stock Exchange as a secondary offering.
The reorganization of the company and the completion of the Nasdaq listing is expected on May 11 or around that date, according to Wise's documents.
Wise shares gained 1.6% in London trading on May 11. Year-to-date, they've risen by 20.8%. Since its market debut in July 2021, Wise shares in London are up about 33% as of May 8. However, the company's stock has yet to be included in the UK's main stock index, the FTSE 100 — primarily due to its dual-class share structure, Bloomberg notes.
The purpose of Wise's dual listing
According to Wise's CEO Kristo Kaarmann, the dual listing should, among other things, boost the liquidity of the shares. This move is also linked to the company's plans to scale its business in the U.S., including through the Wise Platform division, which provides banks with infrastructure for currency operations. Kaarmann mentioned that one of the fintech company's largest clients is Morgan Stanley. Wise is also in talks with other American banks, the CEO clarified in an interview with Bloomberg.
"We can start trading in the morning in London and then continue it in the afternoon in New York — that's one of the reasons for the dual listing. Additionally, we are reaching out to a new audience of American shareholders and analysts, and this gives us an opportunity to reintroduce the company to the market," Kaarmann stated.
According to him, major institutional investors, including billionaire Peter Thiel, the venture capital firm Andreessen Horowitz from Silicon Valley, and the British investment company Baillie Gifford, have shown interest in Wise shares on the London Stock Exchange since 2021, but were unable to purchase them due to insufficient liquidity.
Although the liquidity of Wise's shares has increased since its IPO five years ago, "it’s still nowhere near the liquidity of Wise's American competitors," Kaarmann said.
Listing on Nasdaq will also allow Wise to maintain its dual-class share structure, which is more common in the U.S. than in the UK, Bloomberg points out. This system gives CEO Kristo Kaarmann key control over the voting rights in the company. In London, the operation of this structure was supposed to conclude this year, and it has sparked debates among some of the company’s shareholders regarding corporate governance. Nevertheless, ultimately, the move of Wise's primary listing to the U.S. has found support among stakeholders, the agency indicates.
Context
However, Wise won't be able to immediately enter major U.S. indices, including the S&P 500, since its holding structure is registered in Jersey. To qualify for inclusion in such indices (which could attract significant investment from funds that track these benchmarks), Wise will need to prove that it is effectively an American company — for instance, by demonstrating a substantial share of revenue, shareholders, and management in the U.S., Bloomberg explains.