Our view: PrimaryBid has simplified access to the new issue, placing and IPOs market by providing a centralised point for application rather than having to have multiple stock brokerage accounts. Read more...
Review date: 24th March 2021
What is PrimaryBid?
PrimaryBid is a fintech business that’s dedicated to IPOs, new issues and stock placings, and bringing these directly to retail investors who have to some extent been excluded from the primary markets. For more information on what these are read our guide on how to invest in IPOs.
PrimaryBid allows its customers to apply for stock in a new issue though them, this means that PrimaryBid can buy shares in a particular issue and compete on equal terms with institutional investors.
The business has been involved in 100 deals to date with participation ranging between £500,000 and £10,000,000. With individual ticket or trade sizes running between £1,000 and £500,000.
PrimaryBid has, according to its website, accessed more than half a million retail investors to date.
The two main services offered to PrimaryBid clients are the ability to apply for shares in a new issue or IPO and secondly to participate in placings of shares in or from listed companies.
PrimaryBid is an FCA-regulated business that is backed by venture capital money from investors such as the London Stock Exchange and ABN Amro Ventures.
PrimaryBid has both and a desktop portal though the app does appear to be the main access point. The app is free to download and install and you can easily apply for an account with PrimaryBid via the app.
You can receive alerts from PrimaryBid about upcoming issues and view offer documents such as a prospectus where applicable, and subscribe to or register interest in those deals that appeal to you. PrimaryBid is largely focused on UK new issues but it has also partnered with Euronext that could allow it to participate in European deals going forward.
Investing with PrimaryBid
Using PrimaryBid you can apply for shares in companies that are floating on the stock exchange for the first time. These deals are known as flotations or IPOs and are part of the primary markets through which companies access capital, as opposed to the secondary markets, where shares are traded independently of any fundraising.
To apply for shares in a new issue you first need to open a PrimaryBid account and to do that, you will first need to download their app from either the Apple or Android app store, or register using their website.
Note though that for some issues you will also need to be an existing customer or account holder of the company that’s floating, added to which you will need to have a trading account with a stockbroker into which PrimaryBid can transfer any shares you are allocated.
PrimaryBid is not the first platform to try and democratise new issues. ALL IPO which was acquired by ADVFN in 2009, ran a similar service, however that shut down in 2018 creating a gap in the market for PrimaryBid to try and fill.
- Using PrimaryBid you can stay in touch with details of upcoming new issues and placings.
- You can receive real-time alerts on placings that are not usually made available to retail traders or are concluded before they get a chance to participate.
- PrimaryBid does not charge fees or commissions to investors instead it receives a commission it has negotiated with the companies that are issuing shares.
- All applicants for news issues via PrimaryBid receive the same pro-rata allocations, at the same price, which is also the price that institutional investors in the offers receive.
- To use PrimaryBid’s services you will need to have an existing stockbroking account and not all brokers are registered with them.
- It’s not possible to apply for new issues or placings, through PrimaryBid, for your SIPP and ISA accounts.
- PrimaryBid does not get access to all new issues, only those of the companies that allow them to participate.
PrimaryBid Charges & Fees
There are no charges for PrimaryBid customers for using the service. Instead, PrimaryBid gets paid by the issuing companies, based on the amount of money that PrimaryBid raises for them.
Competitors such as Interactive Investors and Hargreaves Lansdown also run commission-free IPO applications service. All three services are likely to have different IPOs and new issues on offer at different times.
It may also be worth checking with your existing stockbroker to find out if they have a new issues service, or if not if they are registered to receive the transfer of allocations from PrimaryBid, and if there are any charges for such transfers.
PrimaryBid & The London Stock Exchange (LSE)
The London Stock Exchange Group manages and operates the London Stock Exchange, the UK’s premier securities market place. Which is the venue that many companies wishing to float and list on the stock exchange will choose to do so on.
The LSE which had previously collaborated with PrimaryBid made a direct investment through its participation in a $50.00 million Series B fundraising, conducted by PrimaryBid back in October 2020.
At the time Charlie Walker, Head of Equity and Fixed Income, Primary Markets at London Stock Exchange plc said that
“PrimaryBid has become an important part of the U.K.’s capital raising ecosystem and we look forward to working with them to further enhance retail investor access to capital markets within the U.K. and globally.”
Having the London Stock Exchange on board as a partner and investor boosts PrimaryBid’s credibility and that association may help to persuade companies that are listing in London, to include PrimaryBid, and retail investors generally in their IPO plans.
PrimaryBid & Deliveroo IPO
Deliveroo is to list on the London Stock Exchange and will allow PrimaryBid customers to apply for shares. Though they must first register their interest and be, or become a Deliveroo customer. The food delivery service has been valued at as much as £9.0 billion, so a successful listing would be a sizable deal and a feather in the cap of the LSE, which competes with exchanges in the US, Europe and Asia for this type of large deal.
Once again there will be no charges levied by PrimaryBid when Deliveroo list its shares. PrimaryBid clients and Deliveroo will be able to apply for the issue free of charge.
Deliveroo is making £50.00 million worth of shares available to what it calls its community of users who can apply for between £250.00 and £1000.00 worth of stock.
The IPO price range has been set at between £3.90 and £4.60 per share and dealings in Deliveroo are expected to commence at 8.00 am, London time, on April 7th 2021.
The community offer aside the Deliveroo listing is being aimed at institutional investors and not the general public. Other stockbrokers may be able to participate, but PrimaryBid is likely to be the main conduit for private client interest.
PrimaryBid & PesionBee IPO
Online pension manager PensionBee is thinking of listing via an IPO the business which was formed back in 2014 aims to simplify the pensions process. Something that many would argue is long overdue. PensionBee has partnered with PrimaryBid to provide its customers with an opportunity to acquire shares in Pension Bee, if and when it decides to list on the LSE.
To participate in this offer you will need to have a PrimaryBid account and have a pension with PensionBee or undertake to transfer one to them. You will also need to pair your PensionBee and PrimaryBid accounts. Though if PensionBee does IPO you won’t need to have a separate stockbroking account to take delivery of the stock which can be held in the firms corporate sponsored nominee account.
No decision on whether to list or not has been made as yet. Nor has a prospectus been published. However, the inference, from the partnership between Pension Bee and PrimaryBid, is that PensionBee customers will get first dibs in any IPO and that they will need to apply for stock through PrimaryBid.
PrimaryBid ParselyBox IPO
Parsley Box is a food/recipe box delivery service aimed at the independent 60+ age group. Like PensionBee it is considering an IPO. though it hasn't made a final decision as yet.
However, in preparation for a possible floatation Parsley Box has partnered with PrimaryBid to allow Parsley Box customers to register interest and apply for shares in any subsequent IPO.
Customers can register their interest in Parsley Box through the PrimaryBid app or website, and as with all of PrimaryBid's new issues there are no fees or commission to pay should Parsley Box issue shares and list on the stock exchange.
For the moment at least PrimaryBid is the only place that you can register your interest in the Parsley Box IPO, should the company proceed with its listing proposal.
Placings are secondary issues and fundraisings by listed companies, or the sale of a significant stake in a listed business by an existing shareholder, perhaps a founder or institutional investor.
These deals can often take place at short notice and on a first come first served basis and they can be concluded quickly, perhaps within a business day.
As such retail clients would not normally get the opportunity to participate or be able to move quickly enough to apply for stock. PrimaryBid alerts its users in real-time about such placings giving then the chance to participate.
The platform has been involved in large deals for the likes of Ocado and Compass Group and many smaller deals too.
PrimaryBid has been involved in more than 100 issues to date.
If you don't have sufficient funds in your PrimaryBid account to participate in a placing you will need to transfer that money in via your debit card. Something that’s not always easy to do in a rush, especially if a larger transfer is involved.
Once again PrimaryBid charges nothing for its services here as it’s remunerated by the seller of the placing stock.
PrimaryBid New Issues
New issues are the listing of stocks coming to market for the first time, often these are companies that are looking to raise money to expand and grow their business. Although it’s becoming increasingly common for businesses to source external capital from private markets during their growth phase and to use a new issue as a way of realising the value within the company, for the founders, and their VC and PE investors.
New issues tend to take one of three forms, the IPO, the placing or the introduction. The placing and introduction will not normally allow for retail client participation. And though IPOs are somewhat more democratic, there is no guarantee that retail clients would be able to secure an allocation. This is exactly why PrimaryBid was founded.
An IPO or Initial public offering is a particular form of new issue that was popularised in the USA. Under an IPO a company decides to offer shares in itself for sale to investors and appoints brokers and investment bankers to manage the floatation.
These brokers and bankers along with the businesses lawyers prepare listing documents that set out the details of the proposed issue, the company and its business performance.
The advisors to the issue will typically take the company's management on a roadshow to meet prospective investors and to tell the company’s story. At the end of which, the bankers will gauge interest in the issue, build a book of clients who are prepared to invest and establish the price at which they are happy to do so. Once this has been done the shares list on the stock exchange at the IPO price and then trade freely in the secondary market.
PrimaryBid looks to participate in IPOs on an equal footing to institutional investors and to pass that equality on to retail clients. However the ability to participate in an IPO is determined by the company that’s listing and its advisors, and if they don’t include PrimaryBid in the offering then you can't participate through them.
If PrimaryBid is allowed to participate in an IPO then it negotiates terms with the issuer and does not charge its users any commission or fees for subscribing to the IPO.
The allocation in a new issue is the number of shares that you secure from your application to subscribe to the new issue. Allocations are based on supply and demand. Popular IPOs are often oversubscribed, that is investors apply for more shares than the company is issuing and therefore allocations are scaled back.
This happens regularly and to the extent that if you receive an allocation of 100 per cent of the shares that you applied for in an IPO, then that’s not a good omen for the performance of the stock in the secondary market.
PrimaryBid acts as an aggregator of retail client interest in a new issue or placing and uses that buying power to put itself on the same footing as institutional investors. Aggregating their user’s interest means that PrimaryBid can get a better allocation than retail clients could hope to achieve on their own, and with community offerings PrimaryBid may also be the only channel, through which real customers can apply for stock in the new issue.