{"id":894,"date":"2024-06-12T00:03:41","date_gmt":"2024-06-12T00:03:41","guid":{"rendered":"https:\/\/tradetrovex.com\/index.php\/2024\/06\/12\/raspberry-pi-soars-on-debut-in-boost-for-london-ipo-market\/"},"modified":"2024-06-12T00:03:41","modified_gmt":"2024-06-12T00:03:41","slug":"raspberry-pi-soars-on-debut-in-boost-for-london-ipo-market","status":"publish","type":"post","link":"https:\/\/tradetrovex.com\/index.php\/2024\/06\/12\/raspberry-pi-soars-on-debut-in-boost-for-london-ipo-market\/","title":{"rendered":"Raspberry Pi soars on debut in boost for London IPO market"},"content":{"rendered":"
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Following a drab year for UK stock market flotations in 2023, there was a real shot in the arm for sentiment for the London Stock Exchange this morning, with the affordable computer supplier Raspberry Pi getting off to a rip-roaring start to life as a public company.<\/p>\n

Shares in the business were priced at 280p each \u2013 at the top of the range published prior to the Initial Public Offering (IPO) \u2013 which valued Raspberry Pi at \u00a3541.6m.<\/p>\n

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Within minutes of conditional trading beginning, though, the shares had soared to as high as 392p each.<\/p>\n

The successful debut will raise hopes that more IPOs will follow and particularly in the tech sector that has underpinned the strength of US stock markets in recent years.<\/p>\n

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Last year was a truly dreadful one for the UK market in terms of businesses going public.<\/p>\n

Just 23 companies came to market, down 49% on 2022, which was the lowest total since at least 2010. And the sum raised by those companies coming to market, \u00a3953.7m, was down 40% on the total raised in 2022.<\/p>\n

Nor was the \u2018after market\u2019 anything to write home about. Shares of CAB Payments, which was the biggest company to list in London in 2023, currently languish at less than half the value at which they came to market \u2013 having been down by some 85% at one point from the offer price.<\/p>\n

That is why today\u2019s strong debut from Raspberry Pi, which raised \u00a3166m during the IPO, is so important.<\/p>\n

Eben Upton, the founder and chief executive of Raspberry Pi, told Sky\u2019s US partner CNBC: \u201cIt\u2019s just a fantastic day, the culmination of a huge amount of work by a lot of people, I couldn\u2019t be happier.\u201d<\/p>\n

This debut is not just important for Raspberry Pi itself but also for the London Stock Exchange after it lost out to the US last year for the listing of another prominent Cambridge-based business, Arm Holdings<\/strong>, the chip designer.<\/p>\n

Explaining why Raspberry Pi had chosen to list in London, Mr Upton said that he had thought about a listing in New York last year and had been \u201cdrawn towards\u201d it, but had realised the \u201csmart money in the US will find you wherever you are\u201d.<\/p>\n

He added: \u201cThere are compelling advantages to this market compared to other possible listing venues.\u201d<\/p>\n

So what are investors \u2013 including retail investors, who were allocated just over 4% of the shares being sold \u2013 getting for their money?<\/p>\n

Raspberry Pi was founded in 2012 and describes itself as being \u201con a mission to put high-performance, low-cost, general-purpose computing platforms in the hands of enthusiasts and engineers all over the world\u201d.<\/p>\n

It has sold more than 60 million low-cost single board computers since it launched, including 7.4 million last year, while it is targeting sales of 8.4 million this year. It is also already profitable, reporting an operating profit last year of $37.5m on sales of $265.8m.<\/p>\n

Mr Upton said that, despite the company originally having started out with the aim of providing an affordable computer that young people could use and its reputation of catering for \u2018hobbyists\u2019, it was now a different proposition.<\/p>\n

Nearly three-quarters of its sales are now for industrial applications such as security cameras and ventilation controls.<\/p>\n

He told CNBC: \u201cThat\u2019s the surprise for us \u2013 as an organisation which has come from this enthusiasts base, that still sees enthusiasts as the heart of the movement, what we\u2019ve realised over the years is that many of these enthusiasts are professional design engineers.<\/p>\n

\u201cThey take Raspberry Pi with them into work \u2013 they get excited about it at home, the next time they are challenged to solve a problem, they take Raspberry Pi with them, they reach for the tools they understand.<\/p>\n

\u201cWe\u2019ve seen adoption across a very broad range of markets from digital signage to industrial control. The challenge will be to stay faithful to the roots of Raspberry Pi in that enthusiast and educational movement even as we do more in industrial.\u201d<\/p>\n

Mr Upton, whose stake in the business was valued at \u00a311.9m at the offer price, said during roadshows the company has an addressable market of $21.2bn.<\/p>\n

He said that Raspberry Pi\u2019s advantage, in going for that market, was two-fold.<\/p>\n

He added: \u201cWe\u2019ve built an organisation\u2026 that has these end to end capabilities \u2013 we do everything, build semiconductor IP (intellectual property), we build chips, we build board level product, we do software, we assist our customers in design. It\u2019s that breadth of the organisation.\u201d<\/p>\n

Welshman Mr Upton said that Raspberry Pi also enjoyed \u201ccompelling cost structure advantages\u201d which enabled it to sell products cheaply and that this would be the \u201clever\u201d for penetrating the larger industrial market.<\/p>\n

The company \u2013 whose backers include Arm Holdings \u2013 is also doing more in semiconductors.<\/p>\n

He went on: \u201cSemiconductors are a supporting act for our electronic businesses \u2013 we build semiconductors because they allow us to build better electronic products\u2026 we do also sell some semiconductors ourselves \u2013 these are 50 cent chips, compared to $50 boards, but in terms of unit sales, this might be the year when we cross over from doing more chips than we do boards.\u201d<\/p>\n

Vital to how Raspberry Pi is viewed by investors in the near term will, of course, be hitting its numbers \u2013 something that, for example, CAB Payments spectacularly failed to do in short order.<\/p>\n

The shareholder base Raspberry Pi has built, though, should work to its advantage. Its existing investors will continue to own some 67% of the business, the biggest of which is the Raspberry Pi Foundation, which was founded to promote computer science education for young people. It has committed to remain a long-term investor.<\/p>\n

Others clearly in it for the long run are Arm Technology Investments 2 Ltd, part of Arm Holdings and the hedge fund manager Lansdowne Partners, both of which invested in the IPO, which was co-ordinated by the investment banks Peel Hunt and Jefferies International. Sony\u2019s semiconductor arm is also an investor \u2013 while Raspberry Pi\u2019s employee incentive scheme owns around 13.6% of the business. All of this limits the number of \u2018loose\u2019 shareholders likely to cut and run should the company miss its sales and profit targets in the short term.<\/p>\n

One swallow does not make a summer, of course, but this is nonetheless a hopeful omen for the UK market.<\/p>\n

All attention now turns to whether the Chinese fast-fashion giant Shein<\/strong> chooses to list in London \u2013 and, if it does, the reception it receives from investors.<\/p>\n<\/p>\n

This post appeared first on sky.com<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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