Nasdaq Beats NYSE in IPO Capital Raised
Nasdaq and NYSE Rivalry Reignited
Companies making their IPOs with Nasdaq Inc. (NDAQ) have raised more money than those going public with the New York Stock Exchange so far this year. It’s only the third time in the past decade Nasdaq has edged out the NYSE in terms of capital raised on IPOs.
Nasdaq overtook the NYSE raising $12.2 billion to the NYSE’s $10.9 billion so far in 2020. This was in part thanks to a massive debut from Warner Music Group (WMG) which raised more than $1.9 billion for its IPO last week.
IPOs have slowed because the coronavirus pandemic caused companies to push back or alter their plans to go public. That said, the market’s recent upswing has many companies reconsidering an IPO, reigniting the rivalry between the two exchanges for new listings.
Nasdaq Hoping to Lure Companies with Lower Fees
IPOs are important to Nasdaq and NYSE because they’re a source of income. Both exchanges charge fees for listing and for the number of shares outstanding for each company making its debut.
Nasdaq caps its fees for IPOs at $159,000 per year, while the NYSE can charge companies as much as $500,000. Nasdaq’s lower fees could help lure companies concerned about cash flow in an uncertain market.
Plus, the NYSE has struggled. It closed its floor for two months after two people tested positive for coronavirus, halting the bell-ringing, champagne-popping fanfare—and the media attention—companies usually get when they IPO.
Big IPO Celebrations Remain on Pause
The NYSE recently reopened its floor with social distancing policies in place, and last Friday the CEO of Shift4 Payments Inc. (FOUR), Jared Isaacman, was the first executive to ring the iconic bell in-person since the pandemic hit.
There’s still time for the NYSE to push ahead of Nasdaq in IPO fund raising for 2020 if it wins some large public debuts. For example, grocery chain Albertsons was approved in March for an IPO on the NYSE. However, it will be months, or even longer, before companies can expect a blowout IPO celebration with the NYSE, including all the media and branding opportunities that come with it.
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