London Stock Exchange (LSEG) could suffer a $60 billion blow

The London Stock Exchange (LON: LSEG) share price remained under intense pressure after concerns that it could miss a $60 billion listing. The stock retreated to a low of 7,440p on Wednesday, which was a few points below last month’s high of 7,846p.

Arm snubs London Stock Exchange

Arm, one of the world’s biggest semiconductor company, is considering going public in New York. According to Bloomberg, the company, which is owned by Softbank, believes that listing in the US will be the best way forward. 

Softbank sees US-listed companies attracting superior valuations compared to those listed at the London Stock Exchange. Also, it believes that the US has a bigger pool of investors – both retail and institutional that will benefit the company.

Indeed, American stocks tend to always trade at a premium compared to London ones. The FTSE 100 index has a price-to-earnings (PE) ratio of about 12 compared to the S&P’s near 20. The tech-heavy Nasdaq 100 has a multiple of 21. 

Softbank is not the only London-listed company to lament about their listings. In 2022, the CEO of Cineworld regretted that its London listing meant that it did not benefit from the meme stock frenzy. AMC, its competitor, took advantage of its US listing to raise capital as its stock surged.

Another report this week presents a risk for the London Stock Exchange. According to the FT, Shell executives considered shifting their headquarters from London to the United States. While they ruled against doing so, an imminent shift cannot be ruled out. If this happens, it will likely see the company shift its primary listing to New York.

Shell and other European oil companies are worried about their valuation spread to their American counterparts. This is mostly because of the company’s aggressive move to clean energy, which is seen as less profitable.

London Stock Exchange has seen the volume of its new public offerings crash. At the same time, the company has seen several large companies, including BHP give up their listings there.

LSEG share price has done well

London Stock Exchange vs ICE vs Nasdaq

The London Stock Exchange share price has done better than other companies in the past few months. It has risen by 14.6% in the past 12 months while Nasdaq and Intercontinental Exchange (ICE) have dropped by 0.86% and 20%, respectively. This performance was mostly because of its growing data services business.

LSEG will publish its financial results on Thursday. Expectations are that its business did well, helped by its sustainable data business. The company acquired Refinitiv from Reuters in a $27 billion deal. Refinitiv makes more money than its other business divisions combined.

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