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Peer2Peer Finance News | July 24, 2019

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Funding Circle shares slide on first day of official trading

Funding Circle shares slide on first day of official trading
Marc Shoffman

FUNDING Circle saw its share price fall by up to a quarter on its first day of full trading on the London Stock Exchange.

The peer-to-peer lender made its official stock market debut on Wednesday morning (3 October) after closing its £300m initial public offering (IPO) last week and entering conditional dealing at 440p per share.

Samir Desai (pictured), chief executive of Funding Circle, said that the listing was a “recognition of the strength and global impact of our model”.

However, its share price fell to as low as 334p on Wednesday morning before rallying closer to 385p later in the afternoon.

Funding Circle confirmed its IPO plans last month following almost a year of speculation. The firm appointed Merrill Lynch, Goldman Sachs, Morgan Stanley and Numis to manage the float, and pledged that at least 25 per cent of the company’s issued share capital would be placed on a free float.

The P2P lender narrowed the price range of its IPO to 440p to 460p, from an initial 420p to 530p, last week

Read more: Funding Circle remains fastest growing P2P firm

Analysts have expressed concern that the platform was being overvalued.

“It’s really not a good time for UK risk assets and not a great time to IPO,” Neil Wilson, analyst at Markets.com, told Peer2Peer Finance News.

However, Anton Ruddenklau of consultancy KPMG said that Funding Circle’s alternative lending model, its brand, the scale of its customer liquidity and the opportunity to extend its model further afield all support a strong valuation.