NYSE Leads the Race for Tech IPOs
LinkedIn (NYSE:LNKD), Pandora (NYSE:P), Fusion-IO (NYSE:FIO), Bankrate (NYSE:RATE), Demand Media (NYSE:DMD) and RenRen (NYSE:RENN) represent some of the biggest tech IPOs in the recent past. Interestingly, all these companies chose the New York Stock Exchange (NYSE:NYX) for their listing instead of NASDAQ (NASDAQ:NDAQ) which has been home to some of the biggest tech companies including Microsoft, Apple, Google, Amazon, Oracle, Intel and eBay to name a few.
So what has triggered this change among tech companies in favor of NYSE ?
We have a price estimate of $35.50 on NYSE Euronext – which is close to the current market price.
Investment in Technology
NYSE has seen its market share of U.S. equity trading volume drop from 39% in 2008 to about 30% in 2010. Prior to 2006, NYSE controlled more than 50% market share but the changing industry dynamics, entry of new exchanges and high speed trading eroded NYSE’s market share. In order to stay competitive, NYSE has invested heavily in the adoption and improvement of technology. Today, most of its trades are carried out electronically, which has significantly reduced the technological gap between NASDAQ and NYSE.
Aggressive Marketing
NYSE has been extremely aggressive in marketing its service offerings recently – putting in a lot of effort to meet with companies in the Silicon Valley to discuss potential listings. A statement issued by LinkedIn clearly shows that their aggressive marketing strategy hit the right note:
“We thought the NYSE was a great fit for LinkedIn based on their understanding of our business and their vision for how we’d work together.” [1]
NASDAQ cannot to be taken lightly…
NASDAQ pioneered electronic trading, and its trading model is still considered to be the best in the industry. Moreover, the cost of listing on NASDAQ is about 40% less than on NYSE – giving tech companies another reason to choose NASDAQ over NYSE.
NASDAQ recently bagged the Russian search engine Yandex for an IPO, and the upcoming offerings of HomeAway and Zillow will also be listed on NASDAQ.
… especially with some heavyweights in the pipeline
Facebook, Zynga and Groupon are some of the largest companies that are expected to go public within the next year or two and their decision to associate with NYSE or NASDAQ could very well decide the leader in the U.S. cash equity trading market.
See our complete analysis of NYSE Euronext.
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