Latest news with #SamuelKerr
CNBC
04-07-2025
- Business
- CNBC
London IPO fundraising hits a three-decade low in another blow to the UK capital
Fundraising from London IPOs slumped to at least a three-decade low in the first half of this year, new data showed on Friday – raising fresh questions about the fading allure of the U.K. as a hub for global capital. The five debuts on the London market in the first six months of 2025 raised a total of £160 million ($218.6 million), according to new data from Dealogic. That's the lowest level of London IPO funds raised in the first half of the year recorded by Dealogic since it began collecting data in 1995. Even in the aftermath of the 2008 financial crisis, two London IPOs managed to raise £222 million in the first half of 2009, the data shows. London's biggest IPO so far this year was the listing of professional services company MHA, which raised £98 million at its debut on the Alternative Investment Market (AIM) in April. The listings slump in London this year adds to the city's struggles to hold onto its former glory as one of the top destinations for global capital. According to the most recent IPO Watch report from professional services giant PwC, IPO proceeds in the U.K. fell to £100 million in the first quarter of 2025, down from £300 million in the same period a year earlier. This year alone, the city's financial markets have been passed over by firms that had once planned blockbuster listings there. Shein, for example, is reported to be planning an IPO in Hong Kong after abandoning earlier plans to float its shares in London, while Glencore-backed metals investor Cobalt Holdings confirmed to CNBC last month that it had scrapped plans for a London IPO. The troubles aren't limited to new listings – in June, British fintech giant Wise announced it was moving its primary listing from London to New York, and earlier this week it was reported that pharma giant AstraZeneca – the most valuable company on London's FTSE 100 index – is considering moving its listing to the United States. Kristo Kaarmann, Wise's CEO and co-founder, said in a statement at the time that the move would help raise awareness of the company in the U.S., while giving the firm better access to "the world's deepest and most liquid capital market." Dealogic's data highlighted a significant gap between U.S. and U.K. listings so far this year. U.S. markets saw 156 IPOs in the first six months of the year, which collectively raised $28.3 billion, the figures showed. However, Samuel Kerr, head of equity capital markets at Mergermarket, told CNBC that while U.K. equity markets have "been under a cloud of negative press for some time," there could be brighter times ahead for London. "We are seeing more businesses beginning to look seriously at London listings again after several years of reform and broader uncertainty over the regulatory and policy direction of the US," he said in an email. U.K. Prime Minister Keir Starmer has touted his government's plans to revitalize Britain's capital markets, pledging to look into regulation that is "needlessly holding back investment." Last summer, the U.K.'s Financial Conduct Authority overhauled listing rules in a bid to simplify the process of floating shares on the U.K. market. "If London can convert early-stage interest in UK listings into successful IPOs, it will go some way to reversing some of the doom narrative," Mergermarket's Kerr told CNBC. Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, pointed out that exits via IPOs were slowing globally. "It's easy to be bearish when we have news like this," she said in an email on Friday. "The reality is more nuanced, including macro uncertainty and tighter financial conditions have slowed listing globally." Last week, the Financial Times reported that Norwegian software giant Visma had chosen London for its upcoming debut on the public market. Mui argued that this news showed there was still appetite for high growth companies to list in London. "That said, more work is needed to deliver reforms to streamline listing and make London more attractive to businesses," she conceded.
CNBC
30-05-2025
- Business
- CNBC
Shein's embattled IPO signals mounting troubles for fast fashion giant
Fast fashion giant Shein's troubles continue to mount after its much anticipated London initial public offering (IPO) reportedly hit a fresh roadblock. The e-commerce behemoth is now aiming for a Hong Kong listing after failing to receive approval from Chinese regulators for its much hyped London IPO, Reuters reported Wednesday. A London listing had been seen as a boon for the 16-year-old Chinese-founded company, providing international legitimacy and access to a deep and mature pool of Western investors. Analysts nevertheless said they were unsurprised by the move given ongoing scrutiny surrounding the firm. "We've always said that we thought Hong Kong would be a safer IPO option for Shein," Samuel Kerr, head of global equity capital markets at Mergermarket, told CNBC's "Squawk Box Europe" on Thursday. "For international investors, this was always going to be an IPO that had a lot of hair on it, and perhaps it's going to play better to a domestic audience," he added. Neither Shein nor Chinese regulator China Securities Regulatory Commission (CSRC) responded to CNBC's request for comment on the plans. Hong Kong Exchanges and Clearing Limited said it does not comment on individual companies. Shein has faced an uphill battle in its listing ambitions as it seeks to shake allegations over the use of forced labor to produce its $5 t-shirts and $7 shoes. While it vehemently denies the claims, Shein last year shifted its focus from a New York listing to London after facing continued pushback on such issues from U.S. lawmakers. Meanwhile, concern over its commercial practices prompted an EU investigation, which earlier this week found the company in breach of consumer protection laws, including the use of fake discounts, pressure selling and misleading shoppers over sustainability claims. The closure this month of the U.S.'s de minimis loophole for low cost goods — and possible similar measures by the EU and the U.K. — have only added to the company's woes. "The barrage of criticism, which looked set to intensify leading up to a London listing, is considered to be partly why Chinese regulators were reluctant to give the IPO the green light," Susannah Streeter, head of money and markets at Hargreaves Lansdown, wrote in a note Wednesday. Shein's proposed London listing was also seen as providing a much needed boost to the U.K.'s lackluster IPO market after a string of delistings and defections amid intense competition from other financial markets. "This will be a blow for London's ambitions to attract bigger names to list in the capital, but given the obstacles piling up, it's not surprising [that] the company seems to be veering off in another direction," Streeter said. Still, some expressed worry that positioning the controversial listing as the face of London's IPO revival could send the wrong signal to investors. "There was a bit of concern from some in London that Shein would be seen as a benchmark barometer for the future of the London Stock Exchange and for IPOs coming back to London. I think that would have been problematic," Kerr said. Additional scrutiny in the U.K. was also seen as piling pressure on Shein's valuation amid comparisons to other listed retail peers, such as Asos, Next and Boohoo. The company was already reportedly under pressure to cut its London listing valuation to around $30 billion, according to Bloomberg, down from a previously estimated $50 billion. "Going away from the U.K. and away from those U.K. peers will probably allow it to get a higher valuation," Kerr noted. Meantime, a Shein listing could market a further boon for Hong Kong in what is shaping up to be a strong year for the market following fresh flows of capital from on- and offshore investors. "It would have been a meaningful milestone for Shein to list in either London or New York, given the maturity, depth, and valuation potential of those markets," Rui Ma, founder and analyst at Tech Buzz China, told CNBC via email. "That said, markets are ultimately shaped by the quality of their listings and participants. Shein's listing is a win for Hong Kong — but not yet a turning point," she added. Shein investors CNBC spoke to declined to comment on the listing's reported relocation.
Axios
28-03-2025
- Business
- Axios
CoreWeave CEO calls IPO a "victory" despite shrunken size
The CEO of CoreWeave called the company's IPO an "unbelievable, overwhelming victory" despite selling fewer shares than originally intended at a lower price than hoped. Why it matters: The offering was seen as a bellwether, both for the health of the IPO market and the AI infrastructure segment — which has seen dramatic growth, but also hints that capacity may be getting ahead of demand. Driving the news: CoreWeave, which rents the graphics chips needed to run many AI tasks, started trading Friday after selling 37.5 million shares at $40 a piece. It raised $1.5 billion — over $1 billion less than it had recently been targeting. The shares closed flat at $40 Friday afternoon. "The company's first day issues are perhaps no surprise given heavy losses on the Nasdaq, but it marks a difficult moment for the US, and global, IPO market given the profile of the deal and the hope that surrounded it," Samuel Kerr, head of equity capital markets at Mergermarket, wrote in a note. What they're saying:"It would be silly to say we didn't want it to go larger or we didn't want [the stock price] to go higher," CEO Mike Intrator told Axios. But, he said, going public is key to having reliable access to the consistent funding the company needs to build out the computing infrastructure that clients are after. "Some people, they need more time to understand what is a fundamentally different business model," he said, noting that CoreWeave's business is more capital-intensive than many other kinds of tech companies. "We go out and we win a contract and then we go out into the debt lending syndicate and marry up those two contracts so there is an accretive contract that can pay off the debt. You can scale the business to enormous size." Yes, but: There have been mixed signals on the demand for that kind of AI infrastructure, with reports Microsoft is scaling back its plans with CoreWeave, and for its own data centers. Intrator acknowledged that "there is a narrative out there that there is too much capacity" but said that's not what he is seeing. "I continue to be in a position where I am unable to build enough infrastructure to deliver enough computing to sate the clients," he said. "I am sold out. I have been sold out and I'm not allowed to talk about what's coming next, but there is no indication that is going to ease up."
Yahoo
28-03-2025
- Business
- Yahoo
Nvidia-backed CoreWeave's shares likely to open up to 25% above IPO price
(Reuters) - CoreWeave's shares were set to open up to 25% above their offer price in the company's debut on the Nasdaq on Friday. The Nvidia-backed AI infrastructure firm's stock was indicated to trade at $50, compared with the IPO price of $40. At the higher end, it could notch a valuation of around $29 billion on a fully diluted basis. The first major AI startup to list in recent years suffered a setback on Thursday when it downsized its initial public offering. A strong debut would be a welcome sign, offering hope to other IPO candidates that smooth listings are achievable with tempered valuations, but a lackluster performance may deepen skepticism at a time when equity markets are already grappling with tariff-related turmoil. "The U.S. IPO market is at an inflection point. This next batch of deals will determine whether the U.S. IPO momentum continues through the second quarter, or whether issuers decide the risk now isn't worth it," said Samuel Kerr, head of equity capital markets at Mergermarket. The debut will also test the limits of the AI hype, given increasing frustration over Big Tech's massive spending spree and fears of competition from China's artificial intelligence startup DeepSeek. While investors have propelled AI-related companies such as Nvidia and Microsoft to stratospheric valuations, CoreWeave has stirred concerns among risk-averse investors. The company provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. CoreWeave's capital-intensive business model also raised questions about sustainability, sources said. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the growth of the company has been meteoric, its long-term sustainability is yet to be tested. CoreWeave had around $8 billion in debt as of last year. The company said earlier this month it plans to use about $1 billion of the IPO proceeds to pay down debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. While investors appear comfortable with the company's high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. The startup has also consistently posted losses, and IPO investors in the last few years have been wary of backing companies with no history of profitability. FROM CRYPTO TO AI Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after Ethereum's 2022 upgrade, "The Merge," slashed rewards for miners. It signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, forging ties with the most prominent startup in the industry. CoreWeave's revenue has also grown at a breakneck pace, climbing more than eight-fold last year. But it may need to do more to convince investors. "For most venture-backed deep tech startups, it's going to take more than hype to make it through the public markets right now," said Anthony Georgiades, founder and general partner at Innovating Capital. CoreWeave's shares are set to trade under the symbol "CRWV". The IPO was underwritten by a syndicate of 18 banks, including Morgan Stanley, and Goldman Sachs. Sign in to access your portfolio
Reuters
28-03-2025
- Business
- Reuters
Nvidia-backed CoreWeave's shares likely to open up to 25% above IPO price
March 28 (Reuters) - CoreWeave's (CRWV.O), opens new tab shares were set to open up to 25% above their offer price in the company's debut on the Nasdaq on Friday. The Nvidia-backed AI infrastructure firm's stock was indicated to trade at $50, compared with the IPO price of $40. here. At the higher end, it could notch a valuation of around $29 billion on a fully diluted basis. The first major AI startup to list in recent years suffered a setback on Thursday when it downsized its initial public offering. A strong debut would be a welcome sign, offering hope to other IPO candidates that smooth listings are achievable with tempered valuations, but a lackluster performance may deepen skepticism at a time when equity markets are already grappling with tariff-related turmoil. "The U.S. IPO market is at an inflection point. This next batch of deals will determine whether the U.S. IPO momentum continues through the second quarter, or whether issuers decide the risk now isn't worth it," said Samuel Kerr, head of equity capital markets at Mergermarket. The debut will also test the limits of the AI hype, given increasing frustration over Big Tech's massive spending spree and fears of competition from China's artificial intelligence startup DeepSeek. While investors have propelled AI-related companies such as Nvidia (NVDA.O), opens new tab and Microsoft (MSFT.O), opens new tab to stratospheric valuations, CoreWeave has stirred concerns among risk-averse investors. The company provides access to data centers and high-powered Nvidia chips, which have become the most sought-after resource in the race to develop AI applications. However, 77% of CoreWeave's revenue last year came from just its top two customers, including Microsoft. At its roadshow, some expressed worries about CoreWeave's heavy reliance on Microsoft as the tech behemoth's shifting AI data center strategy could impact long-term demand for chips. CoreWeave's capital-intensive business model also raised questions about sustainability, sources said. "I don't know how receptive the market's going to be," said Kamran Ansari, managing partner at Kapital Ventures, noting that while the growth of the company has been meteoric, its long-term sustainability is yet to be tested. CoreWeave had around $8 billion in debt as of last year. The company said earlier this month it plans to use about $1 billion of the IPO proceeds to pay down debt. It also leases its 32 data centers and some equipment instead of owning them, resulting in operating lease liabilities of $2.6 billion. While investors appear comfortable with the company's high leverage since it has strong free cash flow, the risk of commitments not being fulfilled remains a worry. The startup has also consistently posted losses, and IPO investors in the last few years have been wary of backing companies with no history of profitability. FROM CRYPTO TO AI Founded as an Ethereum-focused crypto miner in 2017, CoreWeave pivoted to AI a few years later. It shuttered its mining business after Ethereum's 2022 upgrade, "The Merge," slashed rewards for miners. It signed a five-year contract worth $11.9 billion with OpenAI in the lead-up to the IPO, forging ties with the most prominent startup in the industry. CoreWeave's revenue has also grown at a breakneck pace, climbing more than eight-fold last year. But it may need to do more to convince investors. "For most venture-backed deep tech startups, it's going to take more than hype to make it through the public markets right now," said Anthony Georgiades, founder and general partner at Innovating Capital. CoreWeave's shares are set to trade under the symbol "CRWV". The IPO was underwritten by a syndicate of 18 banks, including Morgan Stanley, and Goldman Sachs.
