THE troubles keep piling up for new London listings. A 75 per cent plunge in shares of CAB Payments on Tuesday (Oct 24) means the processor of currency transactions now ranks as the world’s worst major initial public offering (IPO) this year.

The firm, which was valued at about US$1 billion when it listed in July, plummeted after saying it had been hit by changes to conditions in some “key currency corridors”.

The stock slumped to as low as 53.1 pence, more than 80 per cent below its 335 pence IPO price. Prior to this, China’s Guangdong Lvtong New Energy Electric Vehicle Technology had the steepest drop of any IPO – raising at least US$100 million, with a decline of more than 50 per cent.

CAB joins other high profile London IPOs – including Aston Martin Lagonda Global, Deliveroo and MyProtein.com owner THG – that have plunged after going public. It is the latest blow to a UK capital market that has seen new listings all but dry up this year. England-based chip designer Arm opted to sell shares in New York rather than London last month.

“This is one of those IPO-gone-wrong stories that is worth noting – is this really all that London can offer?” said Neil Wilson, chief market analyst at Markets.com, in reference to CAB Payments.

Canaccord Genuity Group analysts Justin Bates and Portia Patel said CAB’s troubles follow central bank intervention in its markets, including mandates causing firms in West Africa to trade with local banks rather than intermediaries such as CAB.

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CAB cut its full-year revenue guidance by 17 per cent and said it would attempt to reduce costs in order to protect profit.

“In a nutshell, management’s reputation is in tatters,” Liberum analyst Nick Anderson said. “While we think the underlying business has a strong proposition with a large market, management’s inability to foresee events and guide is a major concern.”

CAB shares were down 74 per cent at 56.60 pence as at 1.24pm BST (8.24pm SGT). The share sale valued the company at about £851 million (S$1.4 billion), making it the second-biggest London listing of 2023. However, Tuesday’s slump cut its market capitalisation to just £144 million.

“The stock will likely be dead money until confidence is rebuilt,” said Anderson, who has a buy recommendation. BLOOMBERG