Lord Jonathan Hill has recently recommended reforms in order that London’s financial markets can compete with their European and US counterparts.

The proposed shake-up of the rules for listed companies in the UK is long overdue, and for entrepreneurs such as Brent Hoberman, it’s not difficult to understand why the changes are needed.

Hoberman led Lastminute.com’s IPO when tech sector listings requirements were relaxed around the time of the dotcom bubble bursting in 2000.

Just 18 months after launch, the company, which had already incurred hefty losses to that point, saw their stock plummet by 95 percent.

On that basis it would be easy to understand why Hoberman might be reticent to encourage other tech companies to go public.

However, his experience sees him doing exactly the reverse.


The listing rules at the time gave Lastminute.com a war chest of capital which allowed them to create a leading pan-European player.


In turn, that enabled Hoberman to fend off the mighty, well-funded US giants.

When buying online wasn’t as credible and easy as it is now, Lastminute.com had the cash to buy European ecommerce companies and, in the end, was able to be sold for more than $1bn.

Hoberman won’t deny, but nor will he confirm that made.com, another company that he co-founded, is considering a UK market listing.

What’s interesting to note, however, is that added firepower for liquidity and international expansion could be had by taking the company down the IPO route.

The proposals from the Hill review means that dual-class shares with different voting rights aren’t necessary. Another European success story would be almost assured as a result.

A virtuous circle of more tech IPOs, capital increase, stronger tech analysts and a richer job market should occur as a result of any revisions to the London market.

It’s not in dispute that because of the lack of dual-class share structures which have the ability to protect control of company founders, that London has lost listings in the past.

It’s precisely because of that scenario that founders from Amazon, Facebook and Google among others listed in New York.

Hoberman recalled the time in 2004 that a shareholder of Lastminute.com, who held less than 0.5 percent of the company, tried to oust him. That’s ostensibly because a lot of shareholders only have a short-term vision or strategy.


Fortunately, Hoberman was able to exit the business in 2005 after share prices had soared. Imagine the scenario had the shareholder been successful.

Hill has also proposed that a smaller percentage of shares than the current 25 percent minimum should be able to be freely traded and companies able to float.

Furthermore, the reticence towards SPACs (special purpose acquisition companies) being listed in London has been challenged in the review.

It’s worth considering that, though these shell companies can be massively undervalued with many proving to be overvalued, SPACs can’t be ignored.

London has to be the leader again. Both as technology leaders and for the attractiveness to capital.

SPACs give the public more opportunities to buy shares than a traditional IPO, but more leading UK companies have chosen to list in the US.

More value for the UK economy will be unlocked if the best founders are trusted in the public markets to deliver for their investors..

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