Funancial Times
Can London’s markets ever hope to be entertaining?
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I’ve been thinking a lot about stocks this week. Specifically, I’ve been reminiscing about the time I suddenly found stocks exciting, which was 2021. This was during the SPAC boom – or was it the IPO boom, or was it the crypto boom, or was it the memestock boom?
Back then, I was a financial journalist increasingly distracted from pensions and property and drawn towards the madcap world of tech. The big characters of British business were growing old or going out of fashion. Now, the most compelling personalities were to be found in Silicon Valley – or else running elaborate crypto schemes from the Bahamas or South Korea.
More interesting still was the way investing was becoming a form of entertainment. I came across the subreddit r/wallstreetbets about a month before the Gamestop short squeeze and watched the whole debacle play out in real time, fascinated by how online culture was fusing with the markets.
Nobody emblematised those converging trends better than Elon Musk. So when his company SpaceX filed for a mega-IPO this week, I was transported back to that moment and wondered if we’re in for a new period of anarchic, occasionally foolish but frequently fun investing activity.
What part will Britain’s stocks play in this? Probably not a great deal. Other than the trades which take place in the ether of the blockchain or on Polymarket, investing-as-entertainment focuses primarily on US stocks. Of course, the nature of this contemporary, always-on speculation is that anyone can buy shares listed anywhere in the world from their apps. Yet it’s the US market that attracts the most attention. Indeed, stock markets are kind of the original attention economy.
The closest thing I can remember to British companies commanding this kind of retail investor-friendly excitement was during the equity crowdfunding boom of the 2010s.
Seedrs and Crowdcube competed to host the biggest raises of capital from ordinary investors into craft gin brands, biscuit delivery services, and banks. The recent fate of BrewDog and its equity punk backers is the most high-profile example of what happened to a lot of these in the end1. Many went bust or have been absorved, while others are still trundling along but aren’t likely to have an exit any time soon. The notable exceptions have been Revolut and Monzo. We’ll come back to those in a moment.
It was inevitable that some of these businesses would fail; investors knew that. Still, these stories did not help to dispell this country’s risk-averse tendencies. Regulators often err towards limiting what retail investors can do with their own money, while the public perception of those who take a chance is often a retrospective sneer. With hindsight, we can pronounce it to have been a stupid idea in the first place. But by that logic, so was backing a bank in 2016 that didn’t get its UK banking licence until earlier this year. It’s worked out alright for Revolut backers so far.
Other opportunities to allow British markets a slice of the latest craze have gone missed. In early 2024, the new hot thing was Bitcoin ETFs – investment vehicles through which investors could track the price of the cryptocurrency without directly owning the asset itself. As new offerings crowded into the New York markets, British regulators remained reluctant to approve anything similar. The FCA allowed the less sexy crypto ETNs, with the caveat that they could only be traded by professionals. The closest one could get to a British Bitcoin ETF was one listed in Guernsey (you can read Isabelle Castro’s award-winning article about it here).
What I’m getting at here is that we haven’t always been the best at capitalising on investor interest. This is arguably a sensible approach that avoids some of the worst excesses of speculation. But that sense of fun that is intrinsic to contemporary investing cannot exist without risk. Meanwhile caution feeds into some of the narratives about London that hold it back.
In a new report published this week, researchers at KPMG argued that the narrative about London as a place to IPO is wrong, and that talking the capital down is only contributing to a problem of perception. Part of that reputation is down to how British investors are seen:
UK investors are often viewed as cautious compared with US counterparts, with a stronger focus on well-established, dividend-paying businesses. In contrast, US investors – often former founders themselves – tend to take a portfolio approach, accepting that a smaller number of outliers will make the majority of returns. That difference in risk appetite can influence valuations and shape where companies ultimately decide to list.
There’s a vicious cycle at play here: give UK investors fewer opportunities to take risks and they’ll obviously be averse to them. Or perhaps they’ve seen that the risk isn’t leading to big enough rewards even when successful. To create a sense of excitement, there needs to be belief that something truly big can happen.
This was precisely what Londonmaxxing tried to do for the city’s tech landscape more generally. Recently. I asked Nick Patience, practice lead for AI at The Futurum Group, how the meme could be translated into something more solid – would it be possible, for example, to revive the London Stock Exchange as a venue for tech listings?
He said he was sceptical about the levers available: the US markets offer deeper liquidity, better analyst coverage of growth companies and investors more comfortable with tech valuations. “Regulatory changes to listing rules, which the UK has made, help at the margin but don’t address the liquidity gap directly.” There is also just a limit to what Britain can do to change the situation, since “the IPO question is one where the city is more subject to global capital market forces than to anything it can directly control”.
If it can be achieved, though, he reckons the biggest payoff would be in that same thing KPMG identified: perception.
“Where I think a more active tech IPO market would genuinely matter is symbolic as much as practical,” he told me “A handful of high-profile tech listings on the LSE would signal that London is a place where companies choose to stay and grow, not just a place to incubate before exiting. That signal matters for founders making location decisions and for the wider narrative about the City.”
Attracting some buzzy companies to list in London would also present the best shot of the UK getting a place in this cultural zeitgeist around finance that I’m talking about. It would be cool to see London have its own version of the New York Review of Finance, or the Polymarket Situation Room bar; something that acknowledges how finance and culture are only growing closer together.
Teatime scroll Each week I share links to writings, events, tweets and other conversation-starters. If you have something you think should be in here, feel free to email or DM me.
💳 On a related note, Monzo has pulled out of the US to focus on its UK and Europe operations. Good news for those hoping it will IPO in London?
🍟 Doing its own chips could be the “shot in the arm that Arm needs”, comments Simon Hunt in City A.M., in a column about the “expensive gamble” of Cambridge'-based Arm’s new strategy.
🚙 Here in DC, there’s an interesting debate going on about autonomous vehicles. Andy Masley has written a thorough breakdown of what’s blocking Waymo in the city. This may be worth keeping an eye on for those with an interest in how this technology will be rolled out in the UK.
🔧 The next AI Tinkerers London event is on 7 April and features a fireside chat with Sequoia partner Julien Bek. It looks pretty heavily subscribed already but here’s the link to register.
For transparency’s sake, I hold a tiny investment from this period in the East London brewery Five Points, which is happily still going strong. Next time you have a pint of their beer, please raise it in honour of my £100 stake.