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How to trade Wise’s IPO

Online payments service Wise (formerly known as TransferWise) is planning to debut its shares on the London Stock Exchange on 7 July 2021. Learn how to get involved in Wise’s initial public offering (IPO)​ and how to trade on newly-listed Wise shares.

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When is Wise’s IPO date?

Wise is expected to go live on the London Stock Exchange on 7 July 2021 through a direct listing. Shares will be listed on the LSE’s main market, but a ticker has not yet been announced.

Browse our list of upcoming IPOs​ to find out more stock market debut dates >

What will Wise’s share price be?

In line with the rules of direct listings, Wise will not announce a share price or expected range until its debut day of trading. The company will have a dual-class share structure in place with two classes of shares in issue, class A shares and class B shares, in order to support Wise's focus on its mission as it transitions into the public markets. However, class B shares will not be tradeable.

It has also created a customer shareholder programme named OwnWise, which is designed to reward customers who buy Wise shares and hold them in the longer-term, in order to build its shareholder base.

Wise’s valuation in 2021

Although Wise has not released a share price and an official valuation cannot be estimated, an initial market capitalisation is predicted to be somewhere in the range of £4.4bn and £5bn, according to Reuters. However, Sky News predicts a much higher figure of between £5bn and £9bn.

The company raised approximately £230m in a round last year that valued it overall at £3.6bn. It has since reported a 70% rise in revenue to £302.6m in the financial year 2020.

How to trade on Wise’s IPO

  1. Open a live account. You will be able to access the share once it is listed on our Next Generation trading platform, so keep an eye out for news and announcements.
  2. Choose your product. Spread betting allows you to trade on shares tax-free in the UK*, whereas CFDs are available globally.
  3. Devise a trading strategy and choose whether you want to go long (buy) or go short (sell). Please note that some trading restrictions may apply on initial trading.
  4. Add risk-management tools to your positions. This could include stop-loss and take-profit orders, which may help to close you out of your position if the price moves above or below your specified limit.
  5. Stay up to date with news and economic announcements. It is important to be aware of changing company fundamentals, valuation and share price as we lead up to Wise’s IPO.

Wise’s financials pre-IPO

Wise, which was formerly named TransferWise until its re-branding in February 2021, is a financial technology company that offers online payments and transfers across 60+ countries worldwide. It has around 10m customers that process £5bn in cross-border transactions every month. Due to its popularity within the online payments industry, it is one of the most eagerly awaited fintech IPOs of the year.

According to the company itself, Wise has been profitable since 2017. In the financial year of 2020, Wise’s revenue grew to £302.6m, up from £179m in 2019. This also represents £21.3m in net profit. Since 2019, Wise has had a healthy revenue compound annual growth rate (CAGR) of 54%, and 42% CAGR for volume.

In 2020, TransferWise processed £42bn in cross-currency transfers, or around 63% of its total processing volume of £67bn. Remember that past performance is not indicative of future results, so you should still take the appropriate steps towards risk-management and performing company analysis when considering trading on a company’s IPO.

Why might traders be interested in Wise’s IPO?

  • Wise’s business model is built on saving money, as customers pay lower banking fees when transferring money overseas.
  • A direct listing means that the company can save money on IPO underwriting fees and other transactional costs and instead put the money toward marketing and operations, improving the quality of the business.
  • The company has witnessed rapid growth from little marketing spend over recent years.
  • Wise is a British company and is listing on the London Stock Exchange, whereas most of its competitors are US-based stocks such as PayPal and Square. This may refresh investor sentiment towards the UK stock market after witnessing some underwhelming IPO flops this year, such as Deliveroo.
  • In 2020, Wise received a UK license to offer investment products, which is an avenue they may continue in the future. This signals an exciting area of development for the company.
  • Early stage investors include the likes of entrepreneur Richard Branson and investment management firm Baillie Gifford. Celebrity investment is becoming more popular and is a good way to boost sentiment and create buzz around new shares.
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Are there any risks of trading on Wise?

  • Some investors may not like Wise’s direct approach to the listing, as it is difficult to predict the company’s valuation and share price before its first day of trading, and it can make the price more volatile. The fear of the unknown could have a detrimental effect on Wise’s IPO, which was also witnessed in Metro Bank’s London-based IPO in 2016, when shares slumped upon debut and continued to decline for years afterwards.
  • Investors have raised concerns in the past over governance issues in dual class structures, as it means that Wise’s founder will be entitled to more voting rights than other investors. Deliveroo also chose to list with class A and B shares in 2020, where its share price sank by 30%. However, Wise has re-assured that its structure will be fair and democratic.

Who is Wise’s competition?

Wise has a number of high-profile competitors which are listed, such as PayPal, Square, MoneyGram and Western Union. These are predominantly US based companies that have strong company financials and large consumer bases. However, Wise’s own financials appear promising in terms of future growth, so the company could one day rank alongside its rivals.

Browse our instruments page​ to search over 9,000 shares that you can trade on before Wise shares are available on our platform.

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Who are the underwriters for Wise’s IPO?

Wise’s IPO will be led by blue-chip investment banks Goldman Sachs, Morgan Stanley and Barclays, who will act as lead financial advisors for the company.

How can I trade on Wise’s IPO?

To start speculating on the price movements of listed Wise shares, open a trading account with us. You can then choose your method between spread betting or CFD trading, so read our article on spread bets vs CFDs to learn the differences between the two.

What other IPOs are due to occur this year?

See a list of our upcoming IPOs and new stocks that will be available to trade once listed on our Next Generation trading platform, including some of the most exciting developments of 2021.

Why has Wise chosen a direct listing?

Wise has chosen to go live on the stock market via a direct listing rather than a traditional IPO. The company claims that its direct listing is possible due to its sustainable approach to growth, including keeping costs down and making the shares accessible to both retail and institutional traders.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

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