Many Canadian companies desire to have a presence across the border — and not just on the primary stock exchange or the TSX. There are benefits if the company meets the listing requirements and is approved to trade their stocks on the bigger stage. Cross-listing in the U.S. stock exchange enhances image while gaining international exposure.
More importantly, companies will increase their ability to raise more capital or new money from American and other foreign investors. The most recent Canadian firm to join the dual-listing bandwagon is Lightspeed (TSX:LSPD).
Seeking “buy-and-hold” investors
On September 11, 2020, Lightspeed shares began trading on the New York Stock Exchange (NSYE). The $3.82 billion technology firm from Montreal, Canada, raised US$305 million on its debut. Its digital payments business should appeal to U.S. long-oriented investors and institutions looking to buy-and-hold the stock.
Lightspeed’s CEO Dax Dasilva said many of its investors encouraged the company to list on the NYSE. He adds Canadian technology is well-respected and Canadian companies are potential tech and category leaders. BMO Capital Markets is one of the lead underwriters, while four other Canadian big banks served as co-managers.
Innovative solutions
The stock didn’t have a rousing start as the tech sector was down overall. Nonetheless, Dasilva considers it a significant milestone and a profile-raising moment for Lightspeed. It will use the money from the U.S. public offering to make further acquisitions and develop new products. Also, he hopes American research analysts would cover the company soon.
Lightspeed continues to outperform the S&P/TSX Composite Index with its 11.53% year-to-date gain. The share price bottomed to $12 on March 18, 2020, but has since climbed 235.25%. Dasilva expects the stock to make waves on the NYSE as the cross-listing raises awareness on Lightspeed’s Software as a Service (SaaS) platform.
Profitability is one the horizon even before the 2020 pandemic. As more people embrace online commerce, Lightspeed expects to add more small and midsize merchants to use its technology to expand and thrive in the changing environment.
The recently launched eCom for Restaurants solution is another innovation that aims to help users achieve long-term growth. Dasilva believes Lightspeed has the responsibility to provide solutions designed to support the hospitality industry after COVID-19’s disruption.
The latest solution equips restaurant owners with the right tools to establish their online presence and grow revenue. Likewise, their customers will have an online hub. Lightspeed is facilitating actionable solutions that will enable restaurants to future-proof their businesses using forward-looking technology.
Lightning speed growth
The cross-listing on the NYSE will do wonders for Lightspeed in terms of strengthening its financial position. It can pursue its growth strategies to open the road to profitability. Management reported a 51% revenue growth in Q1 2021 (quarter ended June 30, 2020) versus Q1 2020. The recurring Software & Payments Revenue grew 57% year over year, while global customer locations increased to 77,000.
You can see the lightning speed by which growth is accelerating. Meanwhile, retailers using the platform are growing four to six times faster than traditional retailers. Lightspeed might be the next buy-and-hold stock in the tech sector.
