Alphawave drops 21% in London debut

Canadian semiconductor firm sees market capitalisation plunge by £800m

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Alphawave IP endured a torrid market debut on Thursday, sinking by as much as 21% after London’s opening bell.

The Canadian semiconductor firm shunned the opportunity to list on its side of the Atlantic, opting instead to increase its presence in the UK, where it is establishing a new research and development headquarters in Cambridge. A hub of semiconductor-related activity, the English city has for some time been dubbed ‘Silicon Fen’.

Listing around 28% of the company in the initial public offering (IPO), Alphawave and its shareholders sold £856m ($1.2bn) worth of shares at £4.10 per share, giving it a market value of £3.1bn.

By early afternoon, however, the firm traded below £3.20 per share, wiping almost £800m off its valuation.

In the run-up to the IPO, Alphawave IP’s chairman John Lofton Holt described London as “the obvious venue for the listing” as “both the industry and the business model were born in the UK”.

London Stock Exchange 2021 IPO struggles continue

The London Stock Exchange may well be dismayed, however, by yet another lacklustre debut in 2021. At the end of March, delivery service Deliveroo saw its share price sink by 31% on its first day of trading, in what one banker called “the worst IPO in London’s history”.

Alphawave’s uninspiring debut can be attributed in large part to external trends rather than internal problems. The company listed at a time of heightened volatility and anxiety surrounding the value of technology stocks. 

The tech-heavy Nasdaq Composite index has fallen 6% in the last five days of trading, with giants Tesla and Apple closing Wednesday down 4.4% and 2.5% respectively.

By early afternoon, the FTSE 100 stood 1.6% lower at 6889.56.

FURTHER READING: Tesla stock analysis: bearish pattern warns of huge downside

FURTHER READING: Alphabet stock analysis: the dip may be a good long-term buying opportunity

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