Fintech PrimaryBid has launched a call to action to empower “ordinary investors” to purchase shares in deeply discounted offerings.
Earlier this month, the UK Financial Conduct Authority (FCA) announced a series of measures aimed at assisting companies to raise new share capital in response to the COVID-19 crisis. PrimaryBid notes that so far, £2.7 billion in capital has been raised by UK companies but retail investors have been excluded from the process.
As part of the demand, PrimaryBid and other supporters are calling on the UK Government to “protect individual shareholders and employees by respecting their rights to participate alongside the institutional investors, management teams and board members,” in an Open Letter.
In late 2019, the London Stock Exchange (LSE) partnered with PrimaryBid in order to give retail investors the opportunity to access to share offerings at the same terms as institutions.
The letter calls on FTSE and AIM-listed companies to include retail investors in any forthcoming equity recapitalisation plans.
“Retail investors should be afforded the same protections and participation rights as other company shareholders. The technology now exists to include retail in these fundraising details without compromising on timetable or execution. Coronavirus has put significant pressure onto many of the UK’s listed companies who now need to raise equity, including household names with large retail investor followings. It’s only fair that those retail investors can be part of a Great British Recapitalisation.”
While it is not clear how much interest retail may have in participating in new share issuance, a recent write up in the FT explained the opportunity.
Quoting Fabian de Smet, global head of equity syndicate at Berenberg, said the was available capital to invest in discounted shares:
“The market is wide open. And everything has a price,” he stated.
The same report said bankers were optimistic that demand will match supply if shares are offered at a discount.