7 ms·

I'm pleased to see another British company actually stick to the London Stock Exchange. Many are starting to list themselves on the US stock market, Arm being a

I'm pleased to see another British company actually stick to the London Stock Exchange. Many are starting to list themselves on the US stock market, Arm being at the top of my mind in terms of tech. I think I remember them losing 30 £100M+ companies to the US exchange last year including some big really big names. I know this phenomenon isn't isolated to the UK either. With all the issues in Hong Kong over the last few years, companies have fled there too. Don't get me wrong, I understand the rationale. High interest rates, dwindling pension funds, executives wanting wages closer to US execs, fewer high-performing tech companies, Brexit isolation and a lack of committed domestic investors have all contributed to the LSE’s downward spiral. It just seems everything in the business world is becoming more centralised around the US. I don't think that's good for anyone, including US folks. Monopolies do as monopolies do; extract all the wealth they can from the system. The only people who benefit in a scenario where 95%+ of stock trades go through the NYSE is the NYSE.

doublesocket 2y ago
It hasn't gone well for several UK companies listing through SPACs on US exchanges recently. Think that's given plenty of reason for a rethink.
- raverbashing 2y ago
  I'm not sure, but there are other ways of listing besides SPACs, like ADRs
- piltdownman 2y ago
  I can't think of a SPAC, regardless of nationality, that actually succeeded other than Cellebrite. SPACs in their current usage are basically vehicles to circumvent securities fraud and generate wild amounts of money based on hyperbolic slide-decks via PIPE and NAV offerings pre-DA - the amount of EV and Quadcopter plays that were obvious vaporware getting traction in 2020-2022 was insanity.
  - pavlov 2y ago
    I've been tracking SPACs as a curiosity. The only ones on my list that are above the $10 starting price are DraftKings, Hims & Hers Health, and Grindr. In other words: gambling, erection medication, and gay hookups.
    - piltdownman 2y ago
      Lynk Global are merging with SLAM this year to list publicly which is the only other one I'd watch out for - decent business model, first to debut the satellite to unmodified phone tech in a commercial fashion. GENI will probably recover as well.
      - jeffparsons 2y ago
        Lynk Global will competing against Starlink — which is already manufacturing and operating at scale, and is vertically integrated with their launch provider... which will soon be lofting _much_ larger and more capable satellites on their new launcher. I don't see what worthwhile niche will be left for Lynk to play with. The cynic in me can't help but wonder if somebody is hoping to cash out via whatever investors haven't yet noticed the writing on the wall.
        pavlov 2y ago
        I think the lesson in the past couple of years of SPACs is that all the companies that sounded obviously important and useful turned out to be massively overvalued and built on sandcastles of hopes and dreams. Lynk does sound like one of those. And what those few companies that were actually successful — the “gambling, erection medicine, gay hookups” of my previous post — have in common is that they operate businesses that might have some trouble raising money through the gatekeepers of a traditional IPO. (Logical conclusion: if I ever invest in a SPAC, it’s got to be a drug-dealing furry porn site for crypto traders at minimum.)
        piltdownman 2y ago
        They have an actual commercial direct to device service launched, demonstrable, and scalable. I'd also look into the architecture of Starlink versus bent-pipe and other designed-for-purpose system, rather than the retrofit we get from Starlink. This in contrast with their SPAC competitor AST SpaceMobile, who AT&T just announced their strategic partnership with for Commercial service up to 2030 yesterday and spiked their stock 40% in premarket... to still be about $6.50 off the NAV lol https://www.reuters.com/business/media-telecom/att-ast-spacemobile-tie-up-provide-space-based-broadband-network-2024-05-15/ https://www.reuters.com/business/media-telecom/att-ast-space... So yeah, I think the analysts and Engineers are hedging their bets. Starlink has launch capacity but that's about their edge as the incumbent at the moment. The rest have LEO satellites up and are ramping up constellations as we speak.
- toast0 2y ago
  I think of SPACs the same way I think of Regulation Crowdfunding [1]. If the company could have reasonably IPOd, they would have; if they're opting for a reduced process method, it's likely because they wouldn't look good in the traditional process, and it's best to avoid them. OTOH, it's not like I'm investing in individual stocks anyway, I'm on team Boglehead, and everything is in index funds, other than equity based compensation which I don't have at the moment. [1] https://www.investor.gov/introduction-investing/investing-basics/glossary/regulation-crowdfunding https://www.investor.gov/introduction-investing/investing-ba...
justin66 2y ago
I'm sure those reasons are valid, but just the simple fact of the US stock market having much higher valuations than the UK market right now makes me wonder why they'd do an IPO in the UK. They'll get more money for the shares they sell in the US.
robertlagrant 2y ago
From memory at my previous company, that was on LSE AIM, the discussion around LSE wasn't about Brexit or anything like that, it was the amount of investment capital available in US exchanges. The US has definitely got something right with incentivising investment.
- sangnoir 2y ago
  > The US has definitely got something right with incentivising investment. Vacuuming retirement savings of tens of millions of workers and piping the funds directly to Wall Street? I think that captured investor-class who pony up billions but don't vote at AGMs has led to excesses that are negative to society as a whole.
  - robertlagrant 2y ago
    > Vacuuming retirement savings of tens of millions of workers and piping the funds directly to Wall Street Can you be specific? Do you mean people putting their money into pension funds?
    - sangnoir 2y ago
      Most tax-advantaged retirement savings schemes channel retirement money to listed companies and/or Wall Street investment funds by default - pension funds included.
      - robertlagrant 2y ago
        What does "channel" mean here? Do you mean they choose to invest there? "Channel" implies something being done secretively.
        sangnoir 2y ago
        > "Channel" implies something being done secretively. No, it does not. channel: direct toward a particular end or object[1] 1. The Oxford-dictionary-based Google searchbox "define" feature
edh649 2y ago
There's an excellent book just out about this and how the US has taken over the UK business world: https://www.goodreads.com/book/show/199503848-vassal-state https://www.goodreads.com/book/show/199503848-vassal-state
username332211 2y ago
> Monopolies do as monopolies do; extract all the wealth they can from the system. The only people who benefit in a scenario where 95%+ of stock trades go through the NYSE is the NYSE. What's the risk here? That if the NYSE establishes a monopoly, it could extract a 0.5% tax on every trade? I feel the theoretical possibility of wealth being extracted from you is somewhat insignificant compared to the actual extractions you are subjected to in the UK.
- sigwinch28 2y ago
  > What's the risk here? A monopolistic stock exchange could, off the top of my head: increase fees, engage in rentseeking behaviour, impose unfair rules, discriminate (against companies and traders) or reduce the quality of service. Listing on different (or multiple) exchanges ensures that they engage in proper competition. > compared to the actual extractions you are subjected to in the UK An apt example of why it's healthy to have competition. A working professional or business could relocate to a country where less of their wealth is taken from them.
  - FredPret 2y ago
    But your parent comment's point is that the harm from lack of competition among exchanges is a possible future thing, while the harm from being domiciled in a business-unfriendly jurisdiction is far greater and happens right now.
  - deleted 2y ago
    [deleted]
- helsinkiandrew 2y ago
  > What's the risk here? That if the NYSE establishes a monopoly, it could extract a 0.5% tax on every trade? Whilst shares may be listed on the NYSE, they don't have to trade there - there's a number of alternative exchanges/ECNs/books/pools/brokers that will happily buy and sell NYSE listed shares cheaper/quicker than NYSE.
- olddustytrail 2y ago
lxgr 2y ago
Trading becoming centralized in the US is a different thing from trading happening exclusively on the NYSE. As far as I understand, we are so far away from that reality since Reg NMS that we are facing the opposite problems, if anything: A proliferation of markets that brokers are obliged to trade at in the interest of providing "the best price", the combination of which has created a giant industry of latency arbitrageurs.
vasco 2y ago
> Don't get me wrong, I understand the rationale. High interest rates, dwindling pension funds, executives wanting wages closer to US execs, fewer high-performing tech companies, Brexit isolation and a lack of committed domestic investors have all contributed to the LSE’s downward spiral. Those might be factors but I'd wager the dominating factor to choosing to list in a US exchange is the monthly volume of ETF flow on the indexes you join. In the current world I think this factor dominates many others.
- freeopinion 2y ago
  Could you or somebody else explain to the ignorant why that should matter to a corporation? If I want to buy or sale shares of my company once a month or less, why should it matter to me how many millions or billions of ETF flow through any particular index? How does that affect the equity of my company?
  - nemothekid 2y ago
    Key piece is "ETF flow on the indexes you join". Any ETF that a company is a part of increases demand for the stock which will increase the share price.
    - freeopinion 2y ago
      I'm willing to expose my complete ignorance by questioning this wisdom. I get that a startup wants a high stock price so they can raise as much money as possible while giving up as little control as possible. Of course there are other circumstances where corporations' best option for raising cash is to sell shares. So in those circumstances, this reasoning still holds. But what about when I've gotten past funding shortages and I'm a successful company and I want to invest in myself and take back some ownership? Now I have to pay some premium because of something that has nothing to do with the value of my company? Or what if I'm ok not taking back ownership. I'm content to just stay with 60% ownership or whatever? Why do I care what the share price is or what volume of sales is occuring on the stocks around me? In short, high stock prices only benefit me when I'm selling. So this reasoning baffles me for anybody with an ownership mentality. I admitted upfront that I was exposing my ignorance. I'm willing to learn from anybody who will show me a bigger picture. But I dread a bigger picture that assumes that future success at any level can only be obtained with leverage.
CapeTheory 2y ago
Dual class shares are part of the picture here. They are very common in the US, and allow founders to have their cake and eat it. UK regulators have historically frowned upon this, but that stance is beginning to soften.
wlll 2y ago
Last I read (https://www.theguardian.com/business/nils-pratley-on-finance/2024/feb/29/uk-stock-market-isnt-working-undervaluation-wincanton-currys https://www.theguardian.com/business/nils-pratley-on-finance...) companies seem to be undervalued on the LSE, it seems to be like if I ran a company I might be leaving money on the table listing there. Agree that centralisation isn't ideal.
- nashashmi 2y ago
  The wealthiest and most popular exchange brings in the most money. Exchanges realize this and try to sweeten the deal if their exchange is short on a few things. It is not all about money on the table.
  - wlll 2y ago
    What sweetners are there? They'd have to be pretty impressive to make up a significant shortfall in value.
- Aromasin 2y ago
  I'd argue that thinking solely in terms of potential investment opportunity isn't capturing the whole value of trading on your local country's stock exchange. It's more money and a larger investor pool today, but less choice and power over one's destiny tomorrow. These sorts of economic micro-decisions accumulate. Where to put a company HQ, what stock exchange to trade on, hiring locally or abroad, selling up to foreign equity funds. As individual business decisions, the leaders might think it's an insignificant drop in the pond and simply the most important thing is making revenue tick up, but there are consequences to that being your only metric of success. It's jumping ship while the rest of the crew is trying to plug holes and bail it out. You've successfully escaped the sinking ship but are now in deep, shark-infested waters. Perhaps I've just been reading too much on geopolitical power dynamics lately, but as a British person, I fear our economy is suffering from a death-by-a-thousand-cuts from seemingly "insignificant" decisions that pass on tiny parts of our sovereignty to other countries. In the case of companies trading on other exchanges, we're leaving ourselves more open to the whims of the investors on that exchange whose priorities and sentiments don't match the spirit of the country of origin.
nsteel 2y ago
I would like to think it's also partly a message that this move isn't about profit seeking. British companies do not have legal duty to maximise their profit. NYSE investors might not appreciate this foreign idea.
- shagie 2y ago
  Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354 https://www.law.cornell.edu/supremecourt/text/13-354 > While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well. There is no legal duty to maximize profit.
  - throw10920 2y ago
    Thank you for your correction of the parent poster's falsehood.
  - kevin_b_er 2y ago
    Not "profit", but a duty to maximize shareholder value. eBay Domestic Holdings, Inc. v. Newmark A Delaware Corporation has a duty to maximize shareholder value. That's the majority of all publicly held US corporations. So I may generalize and state, _as a fact_, that the majority of public companies in the United States of America are driven primarily by insatiable avarice in a legal duty to their shareholders.
    - 2y ago
nashashmi 2y ago
Does it matter any longer which exchange things are listed on? I can trade any stock on any exchange regardless of where it is. I guess only trading hours and holiday schedule would make a difference.
- kjellsbells 2y ago
  At volume, the stamp tax on UK stock would be significant. More fundamentally companies tend to be valued higher on the US exchanges, which gives companies a bit more freedom of action to raise capital from the market to fund their plans. I don't think UK Gov will cry too much abount RPi. They certainly would be leaning hard on the board of, say, Shell, if that corporation decided to list abroad instead of London (as their former CEO has mooted).
- patmorgan23 2y ago
  Taxes and currency exchange factor in. US has very strong and deep capital markets. There's a reason New York has been the financial capital of the world for the last 100 years and will continue to be for the foreseeable future.
dukeyukey 2y ago
I'm not sure what the real disadvantage is though. Like, as a British person I can easily buy shares in companies listed in the US. If a British company IPOs on the NYSE but keeps it's HQ and most employees in the UK, does that actually say anything about the UK economy, or just a bit about the LSE specifically and maybe some corporate law details?
- rchaud 2y ago
  The stock would be denominated in another currency, and the amount of your capital gains would be affected by forex rates.
  - dukeyukey 2y ago
    Definitely important, but it's more a consequence rather than an economic indicator.
  - t0mas88 2y ago
    Forex would have very little impact. If company earnings are in GBP and that increases relative to USD, the stock price would also increase (in USD) which should lead to roughly the same GBP returns either way.
dheera 2y ago
I just wish they would let Pi users in on pre-IPO shares like Reddit
manojlds 2y ago
Hopefully the proposed British ISA will help make things better.
graemep 2y ago
> I'm pleased to see another British company actually stick to the London Stock Exchange. Many are starting to list themselves on the US stock market, Arm being at the top of my mind in terms of tech. London has never attracted tech companies. Even when I was in the field over 20 years ago the combined market cap of tech was tiny. Only smallish British companies IPOed on London. ARM was small when it originally listed. Now it is large and was not British owned - why would they list in London. > It just seems everything in the business world is becoming more centralised around the US. Financial markets centralise for liquidity. IIRC some dual listed European companies are moving to London.
- alephnerd 2y ago
  It's (slowly) changing. Chinese companies are now considering LSE as an alternative to NYSE/NASDAQ for their dual-listing IPOs due to laxer oversight and auditing requirements, especially now that FCPA enforcement is in full swing and third party audits by Western organizations are required, which Chinese regulators are preventing. That said, it's hard to beat the primacy of the American, Chinese, Singaporean, and increasingly Indian market (at least 2 late stage startups ik in the Bay Area are looking at listing on the NSE because they want to IPO but $100-200M in ARR and consistent growth is not enough to successfully list in the US anymore).
alangibson 2y ago
There is a lot of general flight to safety in the US, but I think the UK is a special case. The UKs economic decline is irreversible at this point. Crumbling (literally) infrastructure, completely isolated elites, out of the EU, inability to build basically anything. Why hang around to find out where the bottom is...

doublesocket 2y ago

It hasn't gone well for several UK companies listing through SPACs on US exchanges recently. Think that's given plenty of reason for a rethink.

raverbashing 2y ago
I'm not sure, but there are other ways of listing besides SPACs, like ADRs
piltdownman 2y ago
I can't think of a SPAC, regardless of nationality, that actually succeeded other than Cellebrite. SPACs in their current usage are basically vehicles to circumvent securities fraud and generate wild amounts of money based on hyperbolic slide-decks via PIPE and NAV offerings pre-DA - the amount of EV and Quadcopter plays that were obvious vaporware getting traction in 2020-2022 was insanity.
- pavlov 2y ago
  I've been tracking SPACs as a curiosity. The only ones on my list that are above the $10 starting price are DraftKings, Hims & Hers Health, and Grindr. In other words: gambling, erection medication, and gay hookups.
  - piltdownman 2y ago
    Lynk Global are merging with SLAM this year to list publicly which is the only other one I'd watch out for - decent business model, first to debut the satellite to unmodified phone tech in a commercial fashion. GENI will probably recover as well.
    - jeffparsons 2y ago
      Lynk Global will competing against Starlink — which is already manufacturing and operating at scale, and is vertically integrated with their launch provider... which will soon be lofting _much_ larger and more capable satellites on their new launcher. I don't see what worthwhile niche will be left for Lynk to play with. The cynic in me can't help but wonder if somebody is hoping to cash out via whatever investors haven't yet noticed the writing on the wall.
      - pavlov 2y ago
        I think the lesson in the past couple of years of SPACs is that all the companies that sounded obviously important and useful turned out to be massively overvalued and built on sandcastles of hopes and dreams. Lynk does sound like one of those. And what those few companies that were actually successful — the “gambling, erection medicine, gay hookups” of my previous post — have in common is that they operate businesses that might have some trouble raising money through the gatekeepers of a traditional IPO. (Logical conclusion: if I ever invest in a SPAC, it’s got to be a drug-dealing furry porn site for crypto traders at minimum.)
      - piltdownman 2y ago
        They have an actual commercial direct to device service launched, demonstrable, and scalable. I'd also look into the architecture of Starlink versus bent-pipe and other designed-for-purpose system, rather than the retrofit we get from Starlink. This in contrast with their SPAC competitor AST SpaceMobile, who AT&T just announced their strategic partnership with for Commercial service up to 2030 yesterday and spiked their stock 40% in premarket... to still be about $6.50 off the NAV lol https://www.reuters.com/business/media-telecom/att-ast-spacemobile-tie-up-provide-space-based-broadband-network-2024-05-15/ https://www.reuters.com/business/media-telecom/att-ast-space... So yeah, I think the analysts and Engineers are hedging their bets. Starlink has launch capacity but that's about their edge as the incumbent at the moment. The rest have LEO satellites up and are ramping up constellations as we speak.
toast0 2y ago
I think of SPACs the same way I think of Regulation Crowdfunding [1]. If the company could have reasonably IPOd, they would have; if they're opting for a reduced process method, it's likely because they wouldn't look good in the traditional process, and it's best to avoid them. OTOH, it's not like I'm investing in individual stocks anyway, I'm on team Boglehead, and everything is in index funds, other than equity based compensation which I don't have at the moment. [1] https://www.investor.gov/introduction-investing/investing-basics/glossary/regulation-crowdfunding https://www.investor.gov/introduction-investing/investing-ba...

justin66 2y ago

I'm sure those reasons are valid, but just the simple fact of the US stock market having much higher valuations than the UK market right now makes me wonder why they'd do an IPO in the UK. They'll get more money for the shares they sell in the US.

robertlagrant 2y ago

From memory at my previous company, that was on LSE AIM, the discussion around LSE wasn't about Brexit or anything like that, it was the amount of investment capital available in US exchanges. The US has definitely got something right with incentivising investment.

sangnoir 2y ago
> The US has definitely got something right with incentivising investment. Vacuuming retirement savings of tens of millions of workers and piping the funds directly to Wall Street? I think that captured investor-class who pony up billions but don't vote at AGMs has led to excesses that are negative to society as a whole.
- robertlagrant 2y ago
  > Vacuuming retirement savings of tens of millions of workers and piping the funds directly to Wall Street Can you be specific? Do you mean people putting their money into pension funds?
  - sangnoir 2y ago
    Most tax-advantaged retirement savings schemes channel retirement money to listed companies and/or Wall Street investment funds by default - pension funds included.
    - robertlagrant 2y ago
      What does "channel" mean here? Do you mean they choose to invest there? "Channel" implies something being done secretively.
      - sangnoir 2y ago
        > "Channel" implies something being done secretively. No, it does not. channel: direct toward a particular end or object[1] 1. The Oxford-dictionary-based Google searchbox "define" feature

edh649 2y ago

There's an excellent book just out about this and how the US has taken over the UK business world: https://www.goodreads.com/book/show/199503848-vassal-state https://www.goodreads.com/book/show/199503848-vassal-state

username332211 2y ago

> Monopolies do as monopolies do; extract all the wealth they can from the system. The only people who benefit in a scenario where 95%+ of stock trades go through the NYSE is the NYSE. What's the risk here? That if the NYSE establishes a monopoly, it could extract a 0.5% tax on every trade? I feel the theoretical possibility of wealth being extracted from you is somewhat insignificant compared to the actual extractions you are subjected to in the UK.

sigwinch28 2y ago
> What's the risk here? A monopolistic stock exchange could, off the top of my head: increase fees, engage in rentseeking behaviour, impose unfair rules, discriminate (against companies and traders) or reduce the quality of service. Listing on different (or multiple) exchanges ensures that they engage in proper competition. > compared to the actual extractions you are subjected to in the UK An apt example of why it's healthy to have competition. A working professional or business could relocate to a country where less of their wealth is taken from them.
- FredPret 2y ago
  But your parent comment's point is that the harm from lack of competition among exchanges is a possible future thing, while the harm from being domiciled in a business-unfriendly jurisdiction is far greater and happens right now.
- deleted 2y ago
  [deleted]
helsinkiandrew 2y ago
> What's the risk here? That if the NYSE establishes a monopoly, it could extract a 0.5% tax on every trade? Whilst shares may be listed on the NYSE, they don't have to trade there - there's a number of alternative exchanges/ECNs/books/pools/brokers that will happily buy and sell NYSE listed shares cheaper/quicker than NYSE.
olddustytrail 2y ago

lxgr 2y ago

Trading becoming centralized in the US is a different thing from trading happening exclusively on the NYSE. As far as I understand, we are so far away from that reality since Reg NMS that we are facing the opposite problems, if anything: A proliferation of markets that brokers are obliged to trade at in the interest of providing "the best price", the combination of which has created a giant industry of latency arbitrageurs.

vasco 2y ago

> Don't get me wrong, I understand the rationale. High interest rates, dwindling pension funds, executives wanting wages closer to US execs, fewer high-performing tech companies, Brexit isolation and a lack of committed domestic investors have all contributed to the LSE’s downward spiral. Those might be factors but I'd wager the dominating factor to choosing to list in a US exchange is the monthly volume of ETF flow on the indexes you join. In the current world I think this factor dominates many others.

freeopinion 2y ago
Could you or somebody else explain to the ignorant why that should matter to a corporation? If I want to buy or sale shares of my company once a month or less, why should it matter to me how many millions or billions of ETF flow through any particular index? How does that affect the equity of my company?
- nemothekid 2y ago
  Key piece is "ETF flow on the indexes you join". Any ETF that a company is a part of increases demand for the stock which will increase the share price.
  - freeopinion 2y ago
    I'm willing to expose my complete ignorance by questioning this wisdom. I get that a startup wants a high stock price so they can raise as much money as possible while giving up as little control as possible. Of course there are other circumstances where corporations' best option for raising cash is to sell shares. So in those circumstances, this reasoning still holds. But what about when I've gotten past funding shortages and I'm a successful company and I want to invest in myself and take back some ownership? Now I have to pay some premium because of something that has nothing to do with the value of my company? Or what if I'm ok not taking back ownership. I'm content to just stay with 60% ownership or whatever? Why do I care what the share price is or what volume of sales is occuring on the stocks around me? In short, high stock prices only benefit me when I'm selling. So this reasoning baffles me for anybody with an ownership mentality. I admitted upfront that I was exposing my ignorance. I'm willing to learn from anybody who will show me a bigger picture. But I dread a bigger picture that assumes that future success at any level can only be obtained with leverage.

CapeTheory 2y ago

Dual class shares are part of the picture here. They are very common in the US, and allow founders to have their cake and eat it. UK regulators have historically frowned upon this, but that stance is beginning to soften.

wlll 2y ago

Last I read (https://www.theguardian.com/business/nils-pratley-on-finance/2024/feb/29/uk-stock-market-isnt-working-undervaluation-wincanton-currys https://www.theguardian.com/business/nils-pratley-on-finance...) companies seem to be undervalued on the LSE, it seems to be like if I ran a company I might be leaving money on the table listing there. Agree that centralisation isn't ideal.

nashashmi 2y ago
The wealthiest and most popular exchange brings in the most money. Exchanges realize this and try to sweeten the deal if their exchange is short on a few things. It is not all about money on the table.
- wlll 2y ago
  What sweetners are there? They'd have to be pretty impressive to make up a significant shortfall in value.
Aromasin 2y ago
I'd argue that thinking solely in terms of potential investment opportunity isn't capturing the whole value of trading on your local country's stock exchange. It's more money and a larger investor pool today, but less choice and power over one's destiny tomorrow. These sorts of economic micro-decisions accumulate. Where to put a company HQ, what stock exchange to trade on, hiring locally or abroad, selling up to foreign equity funds. As individual business decisions, the leaders might think it's an insignificant drop in the pond and simply the most important thing is making revenue tick up, but there are consequences to that being your only metric of success. It's jumping ship while the rest of the crew is trying to plug holes and bail it out. You've successfully escaped the sinking ship but are now in deep, shark-infested waters. Perhaps I've just been reading too much on geopolitical power dynamics lately, but as a British person, I fear our economy is suffering from a death-by-a-thousand-cuts from seemingly "insignificant" decisions that pass on tiny parts of our sovereignty to other countries. In the case of companies trading on other exchanges, we're leaving ourselves more open to the whims of the investors on that exchange whose priorities and sentiments don't match the spirit of the country of origin.

nsteel 2y ago

I would like to think it's also partly a message that this move isn't about profit seeking. British companies do not have legal duty to maximise their profit. NYSE investors might not appreciate this foreign idea.

shagie 2y ago
Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354 https://www.law.cornell.edu/supremecourt/text/13-354 > While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why they may not further religious objectives as well. There is no legal duty to maximize profit.
- throw10920 2y ago
  Thank you for your correction of the parent poster's falsehood.
- kevin_b_er 2y ago
  Not "profit", but a duty to maximize shareholder value. eBay Domestic Holdings, Inc. v. Newmark A Delaware Corporation has a duty to maximize shareholder value. That's the majority of all publicly held US corporations. So I may generalize and state, _as a fact_, that the majority of public companies in the United States of America are driven primarily by insatiable avarice in a legal duty to their shareholders.
  - 2y ago

nashashmi 2y ago

Does it matter any longer which exchange things are listed on? I can trade any stock on any exchange regardless of where it is. I guess only trading hours and holiday schedule would make a difference.

kjellsbells 2y ago
At volume, the stamp tax on UK stock would be significant. More fundamentally companies tend to be valued higher on the US exchanges, which gives companies a bit more freedom of action to raise capital from the market to fund their plans. I don't think UK Gov will cry too much abount RPi. They certainly would be leaning hard on the board of, say, Shell, if that corporation decided to list abroad instead of London (as their former CEO has mooted).
patmorgan23 2y ago
Taxes and currency exchange factor in. US has very strong and deep capital markets. There's a reason New York has been the financial capital of the world for the last 100 years and will continue to be for the foreseeable future.

dukeyukey 2y ago

I'm not sure what the real disadvantage is though. Like, as a British person I can easily buy shares in companies listed in the US. If a British company IPOs on the NYSE but keeps it's HQ and most employees in the UK, does that actually say anything about the UK economy, or just a bit about the LSE specifically and maybe some corporate law details?

rchaud 2y ago
The stock would be denominated in another currency, and the amount of your capital gains would be affected by forex rates.
- dukeyukey 2y ago
  Definitely important, but it's more a consequence rather than an economic indicator.
- t0mas88 2y ago
  Forex would have very little impact. If company earnings are in GBP and that increases relative to USD, the stock price would also increase (in USD) which should lead to roughly the same GBP returns either way.

dheera 2y ago

I just wish they would let Pi users in on pre-IPO shares like Reddit

manojlds 2y ago

Hopefully the proposed British ISA will help make things better.

graemep 2y ago

> I'm pleased to see another British company actually stick to the London Stock Exchange. Many are starting to list themselves on the US stock market, Arm being at the top of my mind in terms of tech. London has never attracted tech companies. Even when I was in the field over 20 years ago the combined market cap of tech was tiny. Only smallish British companies IPOed on London. ARM was small when it originally listed. Now it is large and was not British owned - why would they list in London. > It just seems everything in the business world is becoming more centralised around the US. Financial markets centralise for liquidity. IIRC some dual listed European companies are moving to London.

alephnerd 2y ago
It's (slowly) changing. Chinese companies are now considering LSE as an alternative to NYSE/NASDAQ for their dual-listing IPOs due to laxer oversight and auditing requirements, especially now that FCPA enforcement is in full swing and third party audits by Western organizations are required, which Chinese regulators are preventing. That said, it's hard to beat the primacy of the American, Chinese, Singaporean, and increasingly Indian market (at least 2 late stage startups ik in the Bay Area are looking at listing on the NSE because they want to IPO but $100-200M in ARR and consistent growth is not enough to successfully list in the US anymore).

alangibson 2y ago

There is a lot of general flight to safety in the US, but I think the UK is a special case. The UKs economic decline is irreversible at this point. Crumbling (literally) infrastructure, completely isolated elites, out of the EU, inability to build basically anything. Why hang around to find out where the bottom is...