(Bloomberg) -- The troubles keep piling up for new London listings. A 75% plunge in shares of CAB Payments Holdings Ltd. on Tuesday means the processor of currency transactions now ranks as the world's worst major initial public offering this year.
The firm, which was valued at about $1 billion when it listed in July, plummeted after saying it had been hit by changes to conditions in some “key currency corridors.”
The stock slumped to as low as 53.1 pence, more than 80% below its 335 pence IPO price. Prior to today, China's Guangdong Lvtong New Energy Electric Vehicle Technology Co Ltd. had the steepest drop of any IPO raising at least $100 million, with a decline of more than 50%.
CAB Payments joins other high profile London IPOs — including Aston Martin Lagonda Global Holdings Plc, Deliveroo Plc and MyProtein.com owner THG Plc — that have plunged after going public. It's the latest blow to a UK capital market that has seen new listings all but dry up this year. Cambridge, England-based chip designer Arm Holdings Plc opted to sell shares last month in New York rather than London.
“This is one of those IPO-gone-wrong stories that is worth noting – is this really all that London can offer?” said Neil Wilson, chief market analyst at Markets.com, in reference to CAB Payments.
Canaccord Genuity Group Inc. analysts Justin Bates and Portia Patel said the company's troubles follow central bank intervention in its markets, including mandates causing firms in West Africa to trade with local banks rather than intermediaries such as CAB.
CAB cut its full-year revenue guidance by 17% and said it would attempt to reduce costs in order to protect profit.
“In a nutshell, management's reputation is in tatters,” Liberum analyst Nick Anderson wrote in a note. “While we think the underlying business has a strong proposition with a large market, management's inability to foresee events and guide is a major concern.”
CAB shares were down 74% at 56.60 pence as of 1:24 p.m. The share sale valued the company at about £851 million, making it the second-biggest new listing in London of 2023. However, Tuesday's slump cut its market capitalization to just £144 million.
“The stock will likely be dead money until confidence is rebuilt,” said Anderson, who has a buy recommendation.
--With assistance from James Cone.
(Updates with stock's ranking among this year's IPOs in first paragraph)
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