Arm shares fall below their listing price as New York lustre wanes

Arm shares fell below their listing price in New York last night as the boss of the London Stock Exchange rejected criticism that the City is losing its status as a leading financial centre.

Having snubbed the City to list on the Nasdaq, the British chip designer’s shares soared to $65 on their debut.

But they have fallen for five days in a row and yesterday dropped below the $51 offer price as the buzz around the listing wore off.

The slump has raised questions over the narrative that New York is a better choice for than London for a so-called initial public offering (IPO).

And LSE boss David Schwimmer hit back at naysayers who suggest the City is losing out to other markets.

‘Anything that is seen as negative commentary about London as a financial centre has become kind of clickbait,’ he said. ‘I think that narrative is overplayed. 

London is a fantastic international financial centre.’ Speaking to the Financial Times, he added that the LSE ‘is by far the leading European stock exchange’.

Arm chose New York over London in a bid to secure a higher valuation, becoming the latest in a series of firms choosing to list or move their listings to the US. 

This month packaging giant Smurfit Kappa said it would move its premium listing from London to New York as part of a merger with US firm WestRock, meaning it will leave the FTSE 100 index.

Meanwhile, building supplier CRH has announced plans to switch its primary listing from London to New York.

Plumbing supplier Ferguson shifted its listing to the US last year. Victoria Scholar at Interactive Investor, said: ‘London remains a source of rock-solid companies.’ But she added that New York can fetch higher valuations.

However, other recent New York listings have followed a similar pattern to Arm this week. Instacart, a US grocery delivery firm, floated its shares at $30 and soared to more than $37 before falling back. 

Shares in software group Klaviyo rose 23 per cent after listing at $30 but gave up most of its gains.

The slide in the Arm share price came as some of the shine wears off the industry following a dramatic surge in Nvidia shares this year.

Nvidia, which previously tried to buy Arm and is a major investor, more than tripled in value between January and the start of this month but has since eased back 15 per cent.

King Lip, chief investment strategist at Baker Avenue Wealth Management, said: ‘Many of these chip names got that AI boost. Some of that fervour has simmered down.’