AUS
NZ
UK
CA
USA
IND
Summary
- Chipmaker Alphawave stock tumbled on its LSE debut.
- It licences high-speed data transmission technology to various chipmaker firms
- The Totonto-based semiconductor IP company was valued at £3.1 billion
Shares of the Canadian chip designer Alphawave IP Group Plc (LON:AWE) dropped as much as 21.95 per cent on its LSE (London Stock Exchange) debut on 13 May within an hour of opening. The stock opened at a value of GBX 410.00 but fell to GBX 320.00 at around 11.23 AM. The volume of shares traded at that time was 22,525,883.
The Totonto-based semiconductor IP company was valued at £3.1 billion as the firm debuted in London trading. Within hours of trading, this market value dropped by more than £500 million.
Alphawave was founded in the year 2017. It licences high-speed data transmission technology to various chipmaker firms. In return, it gets a royalty on every chip it produces.
Also Read: How Brexit Can Help the UK’s Thriving Technology Sector Sail Further
Copyright © 2021 Kalkine Media
The London IPO
The technology company had shunned its listing on the tech-heavy Nasdaq index in New York to choose London. The company announced its intention to list at the LSE last month and had shifted its headquarters to Britain as part of the LSE listing.
John Lofton Holt, executive chairman, Alphawave said that the firm was proud to launch its stock at the LSE. London was zeroed in as the launch city because it was the birthplace of the silicon IP industry as well as the Alphawave company model.
With the help of a strong British investor base, the company has been successful in executing its IPO plans, he added. Many other prominent technology firms have also debuted at the LSE this year. These include names such as Darktrace, Dr Martens, Moonpig and Trustpilot. This has been primarily due to the UK government’s endeavour to make the London stock market more attractive to the technology companies by making appropriate changes.
The company IPO came at a time when the stock markets across the globe have taken a hit due to factors like inflation fears etc. However, another big debut, the food delivery company Deliveroo Holdings Plc (LON:ROO) at the LSE this year has been dismal, its shares tanked over 30 per cent post at debut.
Investment management companies BlackRock and Janus Henderson backed Alphawave as its cornerstone investors. They both bought stakes worth £363 million each in the tech firm, according to the company statement.
Also Read: 5 LSE-AIM Technology Stocks to Look For in 2021
Alphawave’s plans
The IT firm expects the market for its products to grow to US$ 1.5 billion by the year 2025. The firm’s revenue was worth US$ 32.8 million in 2020, up 200 per cent as compared to the year 2018.
Market analysts said that Alphawave has joined the market at a time of high demand for semiconductors. Additionally, this is the time when a shortage of chips is disrupting production of vehicles and electronic goods across the globe.
With the London listing, the company raised sufficient funds with plans to expand its presence across Europe and Asia, along with strengthening its marketing and recruitment capabilities.
Also Read: Semiconductor Shortage Chipping Away at EV industry Production
