Nasdaq OMX Stepping Up IPO Efforts As Market Thaw Seen Ahead
April 21 2009 - 2:15PM
Dow Jones News
Nasdaq OMX Group Inc. (NDAQ) is intensifying its efforts to
secure new initial public offering business rather than luring
companies from other markets.
The strategic switch comes amid a three-way battle with NYSE
Euronext (NYX) and TMX Group Inc. (X.T) in a listings market
starting to show some signs of life.
"We're continuing to be very hopeful that we'll start to have
some of our backlog actually come to market," said Bob McCooey,
Nasdaq's head of new listings and capital markets.
McCooey said the exchange had focused on wooing existing listees
when the financial crisis hit IPO activity, though it continued to
chase new offerings.
"Certainly during a time when we know the market is going
through a challenging environment, we do have a dedicated team and
a focus on taking the Nasdaq message to other listed companies,"
McCooey said in an interview with Dow Jones Newswires.
Listings business is a key revenue and profit driver for an
exchange sector hit by weak trading volume. Listing and transaction
fees account for around 15% of revenue at U.S. equity
exchanges.
Nasdaq's move follows the recent success of two new listings on
rival New York Stock Exchange, doubling the tally seen in the U.S.
over the previous two quarters.
McCooey is preparing a tour of prospective listees on the West
Coast, the center of U.S. float activity during the technology
boom.
Nasdaq and NYSE have been engaged in a fierce and often testy
battle over listings switches, but Scott Cutler, NYSE Euronext's
head of listings in the Americas, said the exchange company hadn't
intensified its efforts to lure companies from its rival when the
IPO pipeline ran low.
"We're investing in this business for the long cycle, and we
continued to invest even in the financial crisis," Cutler said.
NYSE has held "IPO boot camps" for companies considering a
public float, and Cutler said two technology-related IPOs will come
to NYSE Euronext in May.
"We've been working with the private-equity and venture-capital
community on what we can do to improve the market when it returns,"
said Cutler.
For the first quarter of 2009, when Nasdaq OMX had no IPOs, the
exchange won four transfers from NYSE Euronext.
While NYSE Euronext pulled no listings from Nasdaq OMX over that
period, it won the $720 million public float of Mead Johnson
Nutrition Co. (MJN) in February.
NYSE officials said they also expect a few listing switches from
Nasdaq in the coming months, including Myriad Genetics Inc.
(MYGN).
U.S. IPO activity has ticked up in April. Language software
company Rosetta Stone Inc.'s (RST) shares climbed 40% after its
public debut on NYSE Euronext last week, the best-performing IPO in
12 months.
This month also brought offerings from Bridgepoint Education
Inc. (BPI), an online college that also made its debut last week on
NYSE Euronext, and Changyou.com Ltd. (CYOU), a video game company
that listed on Nasdaq in early April.
Nasdaq OMX's McCooey said he's "cautiously optimistic" about IPO
prospects for the remainder of the year, and sees the market
gaining strength in 2010.
-By Jacob Bunge, Dow Jones Newswires; (312) 750-4117;
jacob.bunge@dowjones.com