British Battery Company Abandons London Stock Market
Lack of Support for Start-Ups Prompts Decision
A British car battery company, led by former Tesla executives, has made the surprising decision to leave the London stock market just weeks after securing £500,000 in funding. DG Innovate (DGI), headed by ex-Tesla director Peter Bardenfleth-Hansen, cites a lack of support for start-ups in the City as the primary reason for abandoning the main market and going private.
Red Tape Hinders Growth
The company points to the restrictive listing rules in London, which make it difficult to raise capital, as a major obstacle to its growth. Despite raising £500,000 in early December, claiming it would keep the company afloat until February 2025, and supporting a new joint venture with Indian firm Evage, DGI has struggled to access the funding it needs.
New Direction for Existing Investors
Once the delisting is complete in early 2025, the company plans to propose a mechanism for existing investors to trade their shares privately, allowing them to retain their stakes. This move will give investors more flexibility and control over their investments.
Leadership Team with Tesla Roots
DGI’s leadership team, including Mr. Bardenfleth-Hansen, Christian Eidem, and Jochen Rudat, all have a background at Tesla. Mr. Eidem, a former adviser and classmate of Elon Musk, owns 24% of the business, while Norway’s largest bank DNB is also a shareholder.
Challenges Facing Small Companies
The delisting of DGI highlights the broader challenges facing small companies in the UK. With a lack of demand for exposure to companies at DGI’s stage of development, and no obvious near-term catalysts to change this, the company has been left with little choice but to go private.
Impact on the London Stock Market
The delisting of DGI marks a blow to the London stock market’s reputation as a place where small companies can access capital to grow. Historically, companies have used the exchange to expand, but three years of outflows from UK equity funds have left listed smaller firms starved of support.
A Shift in the Market
The London Stock Exchange’s recent changes to its listing rules, aimed at reducing the burdens of a float, have ironically been used by DGI to push through its delisting plan without shareholder approval. This shift in the market has led to a surge in companies being taken private by foreign investors, weakening the London market.
Sodium Batteries: The Future of EVs?
Based in Wales, DG Innovate is developing innovative batteries made from sodium as an alternative to lithium batteries, which are more widely used in electric vehicles (EVs). This technology has the potential to revolutionize the EV industry, making it more sustainable and environmentally friendly.
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