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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

WE Soda IPO: what to know and how to buy shares

WE Soda, the world’s largest producer of natural soda ash have cancelled their IPO on the London Stock Exchange. Here’s everything you need to know.

Source: Bloomberg

What does WE Soda do?

WE Soda is the world’s largest producer of natural soda ash, an inorganic compound predominantly used in glass manufacturing, but it’s also found in many other products and applications. These include rechargeable batteries, powdered detergents, water treatment and solar panels.

Soda ash can also be made synthetically, but the company prioritises sustainability and is the only business outside of China to exclusively offer natural soda ash on a commercial level. This is achieved by removing the natural mineral trona, often found in rivers and lakes, and then converting it into soda ash.

Who are WE Soda’s competitors?

Arguably, WE Soda’s biggest competitor in the chemicals industry is Solvay SA. The well-established Belgium-based company is also viewed as a global leader in the production and distribution of soda ash. On top of this, Solvay SA offers a range of other services related to the production and distribution of different chemicals and materials.

The main difference between the two companies is the efficiency and environmental impact of the production process. In 2022, Solvay SA began reinventing their manufacturing method after facing heavy criticism from activist investors and have since developed plans to become carbon neutral by 2050. But when it comes to reducing carbon footprints WE Soda are miles ahead.

In fact, a recent study conducted by Morningstar Sustainalytics found WE Soda to be the most sustainable company within the global commodity chemicals subsector.1

What’s more, the company’s eco-friendly production method is one of the cheapest, which has allowed it to become the fastest growing soda ash producer in the chemicals industry.

Other competitors include CINER Group, Genesis Alkali and Tata Chemicals.

When could the WE Soda IPO happen?

On May 31 the company announced its intention to float on the London Stock Exchange (LSE) in June 2023. They did however, cancel these plans due to 'extreme investor caution' in the London IPO market which resulted in a valuation much lower than anticipated.2

Although WE Soda has not yet announced plans to foat elsewhere, the company's boss has said launcing in New York would be a creadible alternative for the IPO.3

What’s WE Soda valued at and what could the share price be?

WE Soda has an estimated valuation of $7.5 billion (around £6 billion) and is looking to sell around $800 million worth of shares.

There isn’t any indication as to what WE Soda’s share price will be yet. Details of this should be revealed closer to the launch date.

What’s the outlook for the WE Soda IPO?

The outlook for WE Soda's IPO will depend on the company's performance.

In 2022 the company brought in a total revenue of $1.7 billion compared to $892 million the year before.

With the increased demand for solar panels and lithium carbonate processing, the need for soda ash is anticipated to rise and WE Soda expects to benefit from this.

What’s more, the global supply of trona (used to make natural soda ash) is plentiful and expected to last at least another 2350 years. This means the company can continue its efficient production process well into the future.

That said, there are many factors outside of the company's control that could impact the success of the IPO, these include economic instability, geo-political events and consumer trends.

WE Soda IPO: How to buy shares

Once WE Soda shares do launch, here’s how you can buy some:
1. Research WE Soda
2. Decide whether you want to trade or invest
3. Open an account with us
4. Search for WE Soda on our platform or app and open a position

If you want to buy and own WE Soda shares with us, you'd open a share dealing account.

If you'd rather speculate on the price of WE Soda shares, you can do so by opening a spreadbetting or CFD trading account.

Both spread bets and CFDs are leveraged products, meaning you can open a position much larger than your initial margin and gain greater exposure to the market.

Please note that profit and loss are determined based on your full position size meaning you could lose money faster than expected, potentially more than your initial outlay. It is therefore important to take steps to manage your risk.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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