Wise Shares Hit by Facebook, Banks Muscling in on Money Transfers

(Bloomberg) -- Wise Plc has slipped below its listing price for the first time ever, after a discounted share sale by its co-founder compounded mounting concerns of increased competition for the money-transfer startup.

Shares fell as much as 1.1% to 799.40 pence on Monday, below the company’s opening price of 800 pence when it started trading in July. Wise slumped on Friday after co-founder Taavet Hinrikus offloaded 81.5 million pounds ($112 million) of stock at a discount.

Read More: Wise Slumps After Founder Hinrikus Offloads $112 Million Stake

The recent slide contrasts sharply with Wise’s heady start on public markets. The stock now trades 30% below its peak reached on Sept. 22, with the past two weeks accounting for the bulk of the declines.

“Wise is a solid fintech with lots of potential, but the market got really ahead of itself from the very get-go,” said Patrick Basiewicz, an analyst at broker FinnCap. “The selldown and other negative newsflow just helped the stock return to a rational level.”

Shares came under pressure this month when Chief Executive Officer Kristo Kaarmann was fined for a tax breach and then again after clearing houses teamed up to launch cross-border payments. Last week, news that Facebook Inc. is starting a pilot program for a digital wallet app that allows no-fee, instant transfers also weighed on Wise.

To top off the negative catalysts, Wise’s second-quarter earnings on Oct. 19 missed analyst estimates, adding to worries about increased competition from major European and U.S. banks.

Wise went public via a direct listing, with holders selling shares straight on the open market. It sidestepped the traditional initial public offering process, whereby underwriters set a price range based on investor feedback during roadshows.

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