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King Digital’s 2014 US stock market debut was, the Wall Street Journal wrote, a “dud”. After the shares sank 16 per cent, the paper compiled five charts examining just how hard the maker of Candy Crush had sucked.
There was analysis and a video, all illustrated by pictures of people in enormous brightly coloured fruit candy costumes on the stock exchange floor.
Negative news events in everyone’s favourite capitalist paradise get negative coverage in the American media (and full disclosure, I worked at the WSJ at the time).
Yet Panglossian longing for the US in London now extends to taking tips from the Trump school of reputation management. London Stock Exchange Group boss David Schwimmer criticised “clickbait” coverage of the market’s struggles. Clare Cole, the Financial Conduct Authority’s director of market oversight, this week suggested, citing feedback from “stakeholders”, that UK journalists could do more to improve the business environment. “We are very negative about our entrepreneurs and listed issuers,” she said.
Fake news, I say. It isn’t my job to improve the listings environment (I checked with management). But it is the regulator’s. This is a poor way to go about it.
“The media is always going to be critical but that is true in the US as well,” says Craig Coben, former global head of equity capital markets at Bank of America. “This is just shooting the messenger. Bad press is a symptom not a cause of London’s problems.”
There is no need to rehash London’s decline in terms of listings, liquidity or valuations. Those interested can consult at least four government reviews, various regulatory consultations, two competing City task forces and innumerable reports. The bunfight to be seen to be involved was such that the Capital Markets Industry Taskforce in May launched one report to rule them all, in an attempt to impose some order.
But those sounding the alarm are dealing with a government for whom boosterish positivity is the price of engagement, says one of them. That means skirting over the idea that ailing growth, political dysfunction, policy complacency and the economic self-own of Brexit underpin London’s troubles.
The City has also been increasingly at odds with itself in recent years — over governance questions such as dual-listed shares, ESG and most obviously pay. When that blows up publicly, like in the 2021 Deliveroo IPO, it is doubtless annoying. That doesn’t mean the hoopla is determinant to a poor outcome. “Institutional investors just tune it out,” says Coben, in a crushing blow to the egos of reporters everywhere.
London news flow just hasn’t been good. Companies that floated in 2020 and 2021 performed poorly everywhere. But London, which needs a vibrant pipeline given some high-profile departures, had several outright embarrassments. Companies shouldn’t go bust a year after listing, as Made.com did, or be accused of channel stuffing as Revolution Beauty was. Companies listed with great fanfare, such as online retailer THG, did not have their business or their story straight. Those that did and could explain it well, like the entrepreneurs behind Wise, fared much better — despite an unusual direct listing, unconventional governance and the odd hiccup along the way.
“There is a quality of company issue,” says Rupak Ghose, former financial analyst and independent adviser. “Whether it is large caps or IPOs, show me the home runs. Name the companies that are really crushing their peer group.”
Those who criticise the media’s failure to “celebrate success” seem to think it can be willed into being by the power of newsprint. Generic bleating risks overshadowing legitimate questions about where robust coverage becomes intrusive or overly personal. But the thinning ranks of specialist business reporters around Fleet Street means executives are actually getting an easier time, reckons one longstanding City spinner.
An interesting question is whether the UK is queasier about money and success than other European markets, and whether that is reflected or created by the media. But I don’t believe that a country where Dragon’s Den is among the most popular TV programmes is anti-entrepreneurship. Greg Jackson, founder of Octopus and one of the more successful tech entrepreneurs in recent years, spends more time on Radio 4 than Nick Robinson. Gymshark founder Ben Francis manages the seemingly impossible feat of running a successful business while appearing a thoroughly decent chap on Instagram. Fintechs such as Anne Boden’s Starling have transformed the retail banking market.
In the age of private capital, founders see less need to go public and venture capital backers hold sway when they do. Stock exchange boss and Hamilton fan Julia Hoggett says this requires London to be “young, scrappy and hungry”, in a way that is unfamiliar to the exchange.
One impressive UK founder told me a while ago that while Nasdaq and NYSE had forced their way on to his schedule, he hadn’t heard from London. I have his details — if anyone would like to get in touch.