News and resources on capital markets, exchanges, trade execution and post-trade settlement.
Wise opens the gate for US investors with ADR program

Wise opens the gate for US investors with ADR program

Wise has opened the door to US-based customers and retail and institutional investors seeking to invest in the company from September 2021.

Debuting in a historic direct listing on July 7, Wise went public as London's largest ever tech listing at £8 billion, and is up nearly 14% to date. Today’s announcement of a new “American Depositary Receipt” (ADR) will enable investors from across the pond to purchase and trade shares in Wise - previously this was only available for UK and EU-based residents. ADRs are a vehicle that allow US investors to purchase shares in foreign companies without the need for cross-border or cross-currency transactions.

On the announcement, Matt Briers, chief financial officer of Wise stated: “Today’s filing begins the process of making it easy and convenient for U.S.-based investors to own part of Wise and have a role in our future growth. The US is an important and growing market for us.”

Through the Wise ADR program, customers and investors will be able to buy and sell Wise ADRs through participating brokerage firms and platforms, under a ticker that will be announced closer to the program’s effective date of 8 September. The program will complement the company’s existing primary listing on the London Stock Exchange and JP Morgan will be the depository bank for the program.

With over 10 million customers, Wise processed £54 billion in international payments volume during the last fiscal year, generating £41 million in pre-tax profits. Wise’s strong performance as one of the few tech firms to reach profitability could make it an attractive investment to tech-hungry US capital.

The Hill Review, Kalifa Review into Fintech and the FCA’s consultation into SPAC listings have defined 2021, demonstrating clear political and industry-based interest in making the UK a more attractive place to list. Chancellor Rishi Sunak has also made his intention to attract and retain tech business apparent on numerous occasions. Wise’s London listing was a win for the UK, and helped instill confidence that regulatory and political support for the London tech sector is likely to remain high on the agenda.

On Wise’s July LSE listing, Dan Thomas, technology senior analyst at Third Bridge explained: "Wise is a disruptor in the international remittances space which has previously been dominated by international banks and a handful of incumbent wire transfer businesses like Western Union and Moneygram."

"Wise doesn’t actually wire money in the same way as a Western Union or Moneygram, rather it holds balances in countries on popular currency routes to sidestep the high fees associated with conventional wire transfers. Wise has a distinct advantage over peers like Western Union and Moneygram because origination is 100% digital and they don’t have to maintain a network of physical locations to disburse cash. Wise will also be counting on growing its footprint in the much larger B2B cross-border payments space."

Comments: (0)