One of these trivial pendantries

The founder of Wise is set to become a paper billionaire next month as the fintech company tees up a £5bn stock market listing.

Kristo Käärmann, who set up the London-based money transfer company formerly known as Transferwise in 2011, is set to own stock worth a fortune when the company goes public next month.

Well, no. He currently owns stock worth a fortune. Yes, the listing and the liquidity might increase that amount. But if something is worth £5 billion next month then it’s a very reasonable bet that it’s worth some billions this month already.

That is, the listing might do all sorts of things to his fortune but it doesn’t actually create it.

8 thoughts on “One of these trivial pendantries”

  1. It’s a remarkably large valuation for a company in such a competitive marketplace. One wonders why the incumbents allowed TF to eat their lunch?

  2. He’ll not be the only stockholder, either. You get your invitation, Tim?
    Barring the branch of the Caja across the road from me, Transferwise has been the only company in the banking sector I’ve I’ve ever used has provided anything in the way of an actual service. The rest of them just treat their customers as a regrettable encumbrance attached to getting their paws on their money. There should be a Barclays Brown on the paint colour charts. The sort of tint you get after a dodgy restaurant meal, a surfeit of lager & a touch of the flu. Definitely not available in non-drip or water soluble.

  3. Hmm. Money transfer.

    May be the valuation is highly dependent upon margins and volume, with volume being the number of economic migrants and remittances?

    Yeah, seems like a good time to list and GTFO right now.

  4. They’ve expanded into banking now, Ducky. They hold balances, facilitate direct debit transactions & provide a debit card. All the banking services people actually need without the necessity of providing private jets & boxes at the opera for the CEO. Oh & real live people answer their phones. Not leave you for an hour listening to Smooth Operator.

  5. Their stated aim is to reduce transaction costs to zero. It’s an odd model to take to the market but they are much much faster and cheaper than traditional operators.

  6. BiS – not seeing any banking services from a very quick perusal of the website, apart from a single deposit account.

    Not a lot of margin in retail banking.

  7. Ducky : they provide a multi-currency debit card, and you can manage the currencies on your smartphone.

    They make the money on exchange charges (declared clearly up-front before each transaction), and (increasingly, I suspect), from interest on the all the money which is waiting in the different currency ‘bins’ waiting to be spent.

    As BiS, a banking service I would thoroughly recommend. Shame that you have to have a ‘real’ bank account (and be 18+) to sign up, otherwise I’d get ones for my kids too

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