Alphawave tumbles 18 per cent on London debut

Shares in Alphawave’s London stock market debut slumped 18 per cent, pushing its market cap down from £3.1bn to around £2.23bn

Over half a billion pounds was wiped from Canadian computer chip designer Alphawave’s value this morning, as the company’s initial public offering (IPO) went awry.

Shares in Alphawave’s London stock market debut slumped 18 per cent, pushing its market cap down from the initial value of £3.1bn to around £2.23bn.

The chip designer, which avoided a listing on New York’s tech-heavy Nasdaq index, set up a price of 410p per share for its float. However, shares fell to as low at 330p today.

With IPOs timing is everything and Alphawave launches onto the market on a tide of demand for semiconductors, with shortages of chips disrupting production of cars and electronic goods across the world, senior investment and markets analyst at Hargreaves Lansdown, Susannah Streeter, said.

The Semiconductor Industry Association revealed that last year global sales increased by 6.8 per cent compared to 2019 even given the pandemic disruption, Streeter continued.

Alphawave is the latest high profile tech company to see its shares collapse at the last minute, rivalling Deliveroo’s share slump of 30 per cent at the end of March – draining more than £2bn off the company’s value.

Toronto-based Alphawave, which was founded in 2017, licences high-speed data transmission technology to chipmakers, receiving a royalty on every chip made.

The chip designer plotted its headquarters in the UK as part of its listing, which paints a good image of the capital, Streeter suggested.

Luring a tech firm from across the Atlantic in such a sought after industry segment is being seen as a coup for London, and will help iron out the creases rucked up by the messy Deliveroo floatation, she said.

The UK had carved out a reputational niche as a hotbed for chip development but successfully nurtured Arm Holdings was cherry-picked for take-over by Japanese conglomerate Soft Bank, Streeter added, suggesting the UK’s eyes are set on Arm’s value and are less welcoming to newcomers.