THIS year’s biggest stock market listing suffered a catastrophic crash today.
Foreign exchange firm CAB Payments’s £851million flotation four months ago was trumpeted for giving the City a jolt of life.
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But it shares nosedived as much as 74 per cent to 55.6p, valuing the company at just £160million after a major profit warning.
“This is a fiasco,” said Craig Coben, former head of equity capital markets at Bank of America Merrill Lynch.
He added: “I can’t recall an IPO that has had a profit warning of this magnitude so soon after floating.
“It sums up so much of what is wrong with the IPO market.
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“This is a company that maybe should never have been public.”
He added that if the company had listed in the US, its board and advisers would likely face an instant lawsuit from investors.
Nick Anderson, an analyst at Liberum, one of the banks that helped float the firm, said that CAB Payments’ stock was now “dead money”.
London has suffered a drought of listings for two years.
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Experts have blamed a lack of investor appetite, companies’ higher valuations, more enthusiasm for higher pay in the US, and even negative media attention.
CAB Payments blamed changes in market conditions and central bank actions in Africa for hitting trading volumes. It is unsure about when the situation will improve.
The blow comes despite its July prospectus claiming that changes by the Central Bank of Nigeria would be inline with its assumptions.
CAB Payments’ fund Helios made £300million from selling shares to investors in the listing.
JP Morgan, Barclays, STJ, Liberum and Peel Hunt all generated lucrative fees from advising it.
A DIM VIEW ON INFLATION MISS
THE boss of JP Morgan yesterday slammed central banks for being “100 per cent dead wrong” on inflation forecasts as the global economy recovered from the pandemic.
Jamie Dimon spoke at a mega finance summit in Saudi Arabia, dubbed “Davos in the Desert”.
He said things were as bad as the 1970s and joined others from Goldman Sachs, Blackrock and Citigroup in a gloomy outlook.
He also blasted inefficient “whack-a-mole” climate change tactics and said results will take “longer than we think due to our own basic incompetence”.
FEARS OF FUEL BILL DEFAULTS
THE boss of British Gas has warned the “worst is yet to come” for energy debts as households brace for winter.
Chris O’Shea, chief of parent group Centrica, said: “We are seeing direct debits being cancelled.”
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The utility is the UK’s biggest energy supplier with 7.5million customers.
But higher rents and mortgages and more expensive basic essentials mean even more Brits will struggle to afford their gas and electricity bills.
Energy regulator Ofgem has said that supplier debts have already hit a record high of £2.6billion and is considering charging customers an extra £17 to help cushion providers.
The energy price cap has been set just below £2,000 this winter.
But Ofgem admitted some households would pay more than last year because the Government scrapped its £400 help for the vulnerable.
EV BOOM ‘ON WAY’
THE number of electric cars on the road is forecast to jump tenfold by the end of this decade, the International Energy Agency said.
In 2020 one in 25 cars was electric but this has risen now to one in five, it said.
The IEA is predicting 220million EVs by 2030, rising from 26million last year.
The Paris-based watchdog expected demand for fossil fuels would peak within the next seven years as a result.
SOFA TAKEOVER
SOFA retailer SCS is being taken private in a £100million takeover by an Italian rival.
SCS shares rocketed by 60 per cent as Poltronesofa offered to buy for 280p-a-share, 66 per cent more than the trading price on Monday.
SCS recently suffered a fall in share price as investors turned against vulnerable retailers.
It listed for £70million on the London stock exchange in 2015.
Poltronesofa, which has 167 shops in Italy, said that the deal is the “best opportunity” to enter the UK market.
SPOTIFY’S SWIFT LIFT
TAYLOR Swift has helped music-streaming giant Spotify post its first quarterly profit in more than a year.
The singer’s new album, Midnights, became the most streamed album on Spotify on Saturday — days before the company reported a €65million (£56million) profit in the third quarter.
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During 2023, Spotify has axed 200 jobs and hiked the price of its ad-free service from £9.99 a month to £10.99.
Despite the increase, Spotify added six million new subscribers over the past three months and now has 226 million globally.
RETAILERS are expecting a rise in spooky sales as Brits are predicted to spend £593million on Halloween this year.
A Savvy Marketing poll says Brits will spend 29 per cent more than last year. Young families will spend the most.
BANK DEBT WOE
BARCLAYS has had to put aside £400million more to cover the cost of bad debts as the bank expects the number of borrowers defaulting on mortgages and loans to rise.
The British lender’s shares slumped 6.5 per cent today after it said it would have to make a £1.3billion provision for bad debts and posted a slip in profits.
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Barclays also warned that it would make a lower net interest margin.
Bosses said more jobs would be lost through “structural” cuts and “efficiencies”.
