The initial public offering of Raspberry Pi, shows the UK is "open for business to technology flotations and that investors are hungry for companies of any size if they tick the right boxes", Dan Coatsworth, investment analyst at AJ Bell, has said.
While the computing company may only fall into smaller company territory, Coatsworth said the IPO was big from a strategic perspective.
He added: “There is a widely held view that tech companies only float in the US where they can potentially get a higher valuation. Raspberry Pi is proof that the UK can still compete against the likes of the Nasdaq and attract home-grown champions.
“Raspberry Pi is a profitable, established name and not reliant on the ‘jam tomorrow’ story that often props up a lot of tech IPOs. It has a large community of users; it makes money rather than simply being a bright idea that is not yet commercialised; and there is a strong social angle as Raspberry Pi has education built into its business model.
“The UK market is woefully under-represented in tech names and hopefully Raspberry Pi’s IPO success will open the flood gates for others in the sector to also float here. If the London Stock Exchange wants a new posterchild for how IPOs should play out and to attract others onto the market, Raspberry Pi is the one to hold up high.”
Raspberry Pi designs and develops low-cost single board computers and computer modules for business use, as well as for educators and enthusiasts.
Coatsworth explained strong demand from institutional and retail investors to take part in Raspberry Pi’s IPO offer meant the stock was priced at the top end of its range.
That valued Raspberry Pi at £542mn, making it the largest IPO on the UK stock market since July 2023 when CAB Payments listed at circa £850mn.
Coatsworth added: ““Raspberry Pi’s shares were priced at 280p in the IPO offer and subsequently jumped 40 per cent to an intraday high of 392p as trading got underway. The initial signs are good but the real measure of whether the deal is a success will come over weeks, months and years, even if a successful first day is always a good start.
“It’s great that retail investors had the opportunity to take part in Raspberry Pi’s IPO offer as the general public has historically been denied the chance to participate in most new listings, instead having to wait until the shares started trading.
“The more companies to go down this route, the better. It would show a level playing field and remove accusations that fund managers and other institutional investors are being given preferential treatment by being able to get in first. The share price reaction to Raspberry Pi’s listing implies that investors believe the company is worth a lot more than its IPO value.”
