I’m happy with how Monzo has grown the business to profitability. They successfully navigated a tricky period of threat to going concern. They are not being overly greedy or hasty in their expansion. The FY2025 report is just out. Headline numbers look good, but I haven’t had a chance to read thoroughly.
In future I hope to see growth in European, North American and African countries. This is where current and future money and opportunities lie. Acquisitions will be the fastest route to scale up, and an IPO would be a good way to raise funds for this.
I’m not sure whether I will cash in 100%. I expect a peak in the initial value then a sharp fall as long term investors cash in. But then there is huge opportunity for further long term growth of Monzo in the future or even being the target of an acquisition themselves. Either way I see upsides for the stock for short term IPO sale or holding long term.
Price per share is too high, my best guess is that at IPO they will issue new shares to which should bring the price per share down significantly, not impacting the value held by existing shareholders.
High share price at IPO reduces liquidity and put off investors buying the shares which could rank the share price.
The price of individual shares rarely impacts liquidity, especially in the era where fractional shares are becoming increasingly common.
Could Monzo execute a share split before IPO? Yes, but we’re talking about shares in the c.£20-30 range, not the £200-300 range or even in a £2,000-3,000 range.
At £25 a share, if an investor can only buy 100 shares instead of 101 it’s going to make absolutely no difference to liquidity or the willingness of investors to buy.
I can’t find a notable example in the past 5 years where a company with a double digit share price split their stock. Most commonly, pre-split share prices have been high-three / low-four digit share prices (e.g. Tesla, Google, Nvidia, Amazon, etc.).
Thanks for sharing, those are very interesting numbers.
I think there are a few weaknesses to Chime’s business that aren’t seen in Monzo. They have less diverse revenue streams, less optionality (they’re not a bank) and no prospect of any international footprint. So I think Monzo should attract a higher multiple, but also recognise that listing in the UK might detract from multiples too.
Chime is a good base level and might represent a lower bound to a range
It should be considered that in an IPO new shares are issued. Not sure about the amount but it will be considerable. So for sure there will be some dilution but hopefully they will not dilute to a level below the current price per share.
See the link below to an insightful research paper on the Chime IPO including comparable quoted company multiples as well as trading metric comparison with competitors, unfortunately doesn’t compare it to Monzo but still a good read.
I asked ChatGPT to reassess Monzo’s valuation in light of Chime’s IPO today and this was the conclusion:
Applying the multiples that public markets just put on Chime, Monzo screens attractively at £10-12 bn today, with upside to £15 bn once its profitable-growth narrative and deposit franchise are fully priced in. That is 2-3 × the December 2024 secondary valuation and sets a clear benchmark for any strategic raise or pre-IPO liquidity event in 2025-26.
I dont buy into the overly negative sentiment re: LSE… the UK media does enough to bash it relentlessly and detrimentally effect peoples opinions of it
However… clickbait. Virtually any company that listed in 2021 has suffered, regardless of exchange/country. The valuations of tech companies peaked in 2021 and fell off a cliff afterward. Probably goes some way to explaining the article
