Stock exchanges vie to win new listings
NEW YORK » With the surging market for initial public offerings expected to pick up even more momentum this year, U.S. stock exchanges are actively campaigning to win these new listings.
The Nasdaq Stock Market Inc. and New York Stock Exchange said the first quarter turned out to be one of the best on record for IPOs since the dot-com boom in 2000. There were 64 flotations that raised $12.1 billion during the period.
This followed a huge year for IPOs in 2006, when 236 deals raised $60 billion, according to the accounting firm PricewaterhouseCoopers. Many analysts believe the balance of 2007 might be even more active than last year, when public offerings raised 28 percent more money than in 2005.
The NYSE and Nasdaq are doing everything in their power to capture more business and fend off international competitors who also hope to grab the IPOs. The Nasdaq has even reintroduced a program to prep IPO-hungry executives.
"We partner with companies as they go through the process of transforming into a public company, and it can seem really daunting for some of them," said William O'Brien, the Nasdaq's senior vice president for new listings. "Getting new listings has a trickle-down effect on our entire business, it's something we take very seriously."
That's one reason the Nasdaq hosted earlier this month what it called an "IPO Boot Camp" in New York. About 100 executives from 61 companies attended the one-day conference, which offered panels on everything from how to form a board of directors to selecting a banker.
O'Brien believes the Nasdaq can help make it easier to go public with a little bit of hand-holding. And, to show how important the Nasdaq views new listings, this was the first time the exchange held the seminar in about a decade.
The total number of Nasdaq IPOs for the quarter, 42, were the most since the same period seven years ago. The exchange had 73 new listings during the quarter, including exchange traded funds and other exchange-traded financial products.
Meanwhile, the New York Stock Exchange recorded 75 new listings during the first quarter, up from 30 in the year-ago period. That number includes six IPOs, with the balance coming from spin-offs and ETFs. The NYSE's listing standards are generally more stringent than the Nasdaq.
Robin Weiss, a senior vice president for NYSE Group Inc. who handles domestic listings, said the exchange takes a more global approach to bringing companies public. With the acquisition of Paris-based Euronext, the NYSE now has two platforms in which companies can access capital.
"We consider this to be a competitive environment from a global perspective, and competition is healthy," she said. "And, we will benefit of having merged with Euronext, and now can accommodate a listing no matter where it occurs."
Companies looking to go public have increasingly turned to Europe and Asia, in part to sidestep a tougher regulatory environment in the United States. European exchanges raised $82 billion from 653 listings last year, while the greater China region raised $62 billion through 140 IPOs, according to PricewaterhouseCoopers.
In some ways, the proliferation of foreign markets was inevitable as they grow more sophisticated, and pose a bigger competitive threat to their U.S. counterparts.