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13 October 2015
This week’s major London IPOs have had mixed fortunes. Payments processing giant Worldpay (WPG) managed to list this morning at 240p, right in the sweet spot of an initial 225p-260p marketing rage which was subsequently narrowed to 235-250p. It currently trades +4% at 250p equating to a positive market debut in light of a slower pace of listings and a cooling in appetite for new paper over the last two years following Foxtons and Royal Mail induced excitement. However, motor insurer Hastings Direct (HSTG), which came to market yesterday, could only manage to get its IPO away at 170p which was well below its 180-185p indicated range, suggesting distinct lack of interest and to make matters worse its closed its first trading session -3% and is in the red again today.
Divergent reactions may reflect preference for size with the former’s £5bn market valuation almost 5 times greater than HSTG anything but paltry £1bn. A case of bigger is better? It likely also reflects confidence in this digital and consumer age which bodes well for the world leader in global payments. Comparison had been made between Hastings and Direct Line which both came out of RBS, however, there is little to compare their debuts with DLG having popped on day 1 and subsequently doubled in 3 years. The battle of Hastings is on while the World pays more attention to the latest London listing.
Mike van Dulken, Head of Research
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