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back to article Top Brit Penguins spurn London Stock Exchange for NYSE

Blighty-based open sourcer Alfresco is going public on the New York stock markets under a new chief executive. The content management software vendor has named former SuccessFactors CEO Doug Dennerline its new chief with the goal of stewarding the company through a successful IPO and growth in the US, former CEO John Powell said …

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I remember reading an article that said lots of companies floated in the US rather than the UK because the US markets use a different formula to calculate the value of a company. This normally resulted in the companies stock demanding a higher price and I image that people like the ceo and others who have been paid in shares might want to take advantage of that. Of course there could be a snow ball effect going on here as well. i.e. following the other big tech companies to the markets they have floated in.

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Meh

Broadly speaking that's correct. Not as simple as a single formula, but there's a whole range of reasons why tech companies generally get better share prices in the US. In particular you've got NASDAQ, which is in practice a dedicated tech market place, unlike AIM, LSE or Euronext. So the potential investors know something about the market and what they want to invest in, and are more eperienced with new tech listings. In Europe, new tech listings are still viewed as dodgy, new-fangled, highly risk things. Subjectively it does seem to me that the European IT sector is rather littered with gravestones of unsuccessful companies, but as I don't have access to the tools I can't compare the failure rate of US versus European IT outfits.

London is recognised as a global technology investment hub, second only to Silicon Valley and New York, but there's a big gulf between those two and London, and a smaller gap between London and other centres such as Toronto and Tel Aviv.

The comments in the article about AIM's lack of liquidity (ie insufficient active investors) are accurate, as are the criticisms of LSE as being too costly and too complex to list on. There's a further element that the investors in the London markets are generally speaking more risk averse than the investors in US equity markets, which also contributes to lower share prices for tech companies.

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Headmaster

third?

"second only to Silicon Valley and New York"

did you mean third?

</pedant>

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Happy

Re: third?

I could argue that I meant Silicon Valley and New York jointly, because they're only 2,900 miles apart. But instead I'll just upvoted you for the pedantry that is core to Commentard values.

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Penguins?

What's the connection with our Antarctic friends?

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Linux

Re: Penguins?

Tux, the Penguin, is Linux's Mascot.

<-- See what I mean?

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Holmes

Re: Penguins?

@Miek, yes we know that. We just don't see the connection with Alfresco's CMS. Is it, for example, a Linux distro?

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Linux

Re: Penguins?

You don't have to be a Linux Distribution to be a Penguin, if that's what you mean.

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FAIL

You could at least....

You could at least have got his name right.

It's Doug Dennerline.

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