A View on NYSE Versus Nasdaq and Tech IPO Race

A recent article by Steve Rosenbush, "NYSE Challenges Nasdaq in the Race for Tech IPOs," in Institutional Investor, and then posted on businessinsider.com highlighted NYSE’s rise in taking the dominant share of tech IPOs. The following is an excerpt, for the full piece see the original piece in Institutional Investor.

Just a few years ago, the New York Stock Exchange was an also-ran in the market for tech IPOs.

Its platform was like a clunky old cell phone, compared with rival Nasdaq Stock Market’s iPhone.

Though the NYSE was home to a few older tech giants, such as IBM Corp. and Hewlett-Packard Co., Nasdaq snared most of the notable tech IPOs of the past few decades, from Microsoft Corp. to Google, Intel Corp. and Oracle Corp.

Yet market shifts can occur swiftly in the Information Age.

A few months ago the NYSE surpassed Nasdaq in the tech listings market for the first time.

The NYSE, which had a 12 percent share of all tech IPOs as recently as 2006, took 58 percent of the market for tech IPOs during the first half of 2011, according to Dealogic.

The NYSE lured companies including LinkedIn and digital publisher Demand Media. Financial data management company Bankrate, computer memory start-up Fusion-io, digital music company Pandora, and Renren, known as the Facebook of China, also have listed on NYSE in recent months.

Nasdaq came in second during the first half of 2011, with a 41 percent share as of July 19.

The NYSE’s gains didn’t happen overnight. They began several years ago with a strategic decision to pursue tech start-ups that had been ignored by NYSE in favor of larger and more established companies. To court them, the NYSE created a set of start-up-friendly alternative listing requirements in 2008, addressing a gap where rival Nasdaq had a huge advantage. The NYSE also invested heavily during the past few years in electronic trading, another Nasdaq stronghold. Then it brought in tech bankers to help sell the revamped NYSE and its still-potent brand, pitching CEOs of start-ups and rival companies that were listed elsewhere. The efforts appear to have borne some fruit. “NYSE has succeeded in making the tech IPO market a horse race,” says Lise Buyer, founder of IPO adviser Class V Group.

The NYSE and Nasdaq are squaring off in the tech IPO market at an important time, as a new generation of tech companies comes of age. Facebook is expected to go public soon, as are Groupon, Twitter, Zynga Game Network, and others. If the NYSE can capture some or all of those IPOs, it may retain its traditional identity as the Big Board, building its brand and attracting more companies that want to be in the orbit of the new giants. “We approach this market with humility, because it wasn’t that long ago that the NYSE was nowhere in tech,” says Douglas Chu, head of the NYSE’s Silicon Valley office, which handles tech IPOs and other business in the western U.S.

...Please go to the original piece in Institutional Investor.