The buy now and pay later fintech Klarna said it was postponing its US IPO amid the market turmoil caused by Donald Trump’s Liberation Day project. Klarna was all set to launch its investor marketing campaign, which would see it list on the NYSE to the tune of $15bn.
Another big factor was the performance of the share price of Affirm [NasdaqGS:AFRM], one of Klarna’s key competitors. Affirm saw its stock crash from over 80 bucks on 18 February, to hit $35 on 4 April, in the wake of Liberation Day. Affirm has seen its market cap almost halve.
Klarna is also believed to be concerned about the impact of Trump’s tariffs on the wider US economy. Klarna makes money from short term loans to consumers and the worry is that the tariffs will undermine consumer spending and make them more cautious about taking on short term credit.
Klarna’s is not the only IPO campaign currently on ice. Nobody is cancelling their IPO campaigns outright yet, but it was noticeable that eToro’s investor marketing campaign, for the broker’s own US IPO, has also been postponed. It seems as if investor sentiment for US IPOs is simply not there at the moment, especially as nobody can predict what Trump will do next.
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Shein wins FCA approval
Fashion retailer Shein has received FCA approval to proceed with its London IPO, which could end up being the largest on the London market this year, if it goes ahead. Shein is navigating its own choppy waters, following Trump’s decision to put 125% tariffs on Chinese goods.
Shein is a low cost clothing manufacturer which, while now based in Singapore, relies heavily on cheap Chinese factoriers to produce mass market garments.
The FCA’s decision is attracting criticism from some UK fund managers, including Aviva Investors, which are concerned about accusations levelled at Shein of using forced labour in its supply chains. James Alexander, the CEO of the Sustainable Investment and Finance Association, accused the FCA of participating in a race to the bottom, and said the move could even compromise London’s status as a financial centre.
Shein was targeting a float of £50bn but recent reports say the company has now cut that to £23bn. The ESG concerns surrounding the company could mean some big fund managers will sit out the IPO, which could make it tougher for the banks to get it away at the right price.
Shein also still needs sign off from Chinese regulators to list in London, which has not been forthcoming yet.
MHA listing boosts AIM sentiment
Accounting firm MHA [LON:MHA] managed to raise £98m for its AIM IPO in London. This is being hailed as a much-need boost for the market for junior companies. The money was raised at a price of 100p.
MHA is regarded as one of the fastest-growing UK accountancy firms and is ranked in the top 20 in the country. It says it is planning to make it into the top 10 in the very near future. MHA is achieving this partly by buying other firms and last year bought rivals Moore & Smalley, bringing £30m in additional revenue to the firm.
In the last 10 years MHA has seen compound annual revenue growth of 13.7% with 87% recurring revenue as of FY24. The increasingly complex tax environment in the UK is providing the firm with additional tailwinds. MHA also benefits from being the UK and Ireland representative of the Baker Tilly international network.
MHA shares have held up so far, trading in the area of 101-102 pence.
