Wise shares show signs of recovery after Citi sparks sell-off
Wise shares began to regain ground this morning after a sharp a sell-off yesterday saw the stock plummet to its lowest price ever.
Shares in the London-based fintech firm fell 2.5% before 9am but recovered to trade up 3% on their opening price.
Wise shares plummeted 7% yesterday following guidance from Citi analysts that their clients should sell the stock.
Citi analysts warned that Wise’s share price has baked in around 20% of annual compound revenue growth over the next eight years which was much higher than the estimated 14 per cent for the wider London stock market.
Russ Mould, Investment Director, AJ Bell told City PM the sell-off had been triggered by a lofty valuation that had priced in too much long-term growth.
He said: “Wise has stacks of potential and stacks of fintech interest but an extremely lofty valuation that prices in a lot of the growth already.
“And if you look at how stock markets are performing at the moment, with primary concerns around rising interest rates and inflation, that is not the kind of stock the market is interested in.”
The firm raised £8bn when it listed in London in July and shares surged 10% on the first day of trading.
However, as of this morning the firm is now trading at a 29% discount on its original IPO price.