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Canadian Chip Designer Alphawave Sees Shares Slump 19% in London IPO

Simon Dawson | Bloomberg via Getty Images
  • Alphawave listed shares at £4.10 each, but they fell to £3.28 within hours of trading.
  • More than £500 million was immediately wiped off the Canadian chip designer's market cap.
  • Founded in Toronto, Alphawave announced it intended to list on the London Stock Exchange last month, shunning New York's tech-focused Nasdaq in the process.

LONDON — Shares of Canadian chip designer Alphawave IP crashed as much as 19% in the company's debut on the London Stock Exchange on Thursday morning.

Alphawave and its shareholders sold £856 million ($1.2 billion) worth of shares at £4.10 per share, giving it a market value of £3.1 billion. The company sold £360 million new shares, and existing shareholders sold down stock worth roughly £496 million. Approximately 28% of the business was listed.

But within hours of trading, the share price fell to £3.28, cutting the market cap by more than £500 million. Shares recovered slightly and were trading at £3.33 by 9 a.m. London time.

The IPO comes as stock markets worldwide take a hit, with the pan-European Stoxx 600 falling over 1.3% in early trade Thursday. European markets are following the negative trend seen in Asia-Pacific overnight and the U.S. on Wednesday after the latest U.S. inflation data for April showed higher-than-expected price pressures.

Founded in Toronto, Alphawave announced it intended to list on the London Stock Exchange last month, shunning New York's tech-focused Nasdaq in the process.

John Lofton Holt, executive chairman of Alphawave IP, said in a statement that the company was proud to be launching on the London Stock Exchange.  

"London was the obvious venue for the listing of our silicon IP business because both the industry and the business model were born in the U.K."

He added: "We are pleased to have executed against our IPO plans successfully, ahead of schedule and supported by a strong UK investor base, alongside a distinguished list of blue-chip investors across the US, Canada and Europe. Today is just the start of our journey."

Other firms that have listed on the London Stock Exchange this year include food delivery firm Deliveroo, cybersecurity start-up Darktrace, shoemaker Dr Martens, digital greetings card seller Moonpig and consumer review site Trustpilot.

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