New listings: Nasdaq and NYSE in tightest battle in five years

US delivery company Instacart's listing on Nasdaq this week puts the stock-market operator into the tightest battle in five years with the New York Stock Exchange (NYSE) for IPOs (public offerings initials), according to an analysis by the Financial Times (FT). It recalls that Instacart's listing comes less than a week after chip designer Arm's $5 billion initial public offering brought the Nasdaq back into investor focus.

Including the sale of up to $660 million in Instacart stock, as well as other ongoing deals, the Nasdaq helped companies raise $9.3 billion this year, compared with $8 billion - the total raised by companies who chose the NYSE, according to Dealogic figures and Financial Times calculations.

The NYSE has won the annual listing battle in 15 of the past 20 years, but the Nasdaq has triumphed in the past four years as tech IPOs dominate new listings, according to the source.

The IPO market has come back to life in recent months after rising interest rates and falling valuations ended the previous "boom" of 2020 and 2021.

This month's deals include more tech companies than at the start of the year, when the market was dominated by the $4.3 billion spinoff of Kenvue, the consumer brands division of Johnson & Johnson, which chose the NYSE .

The two exchanges compete fiercely for new listings, transactions that generate annual fees while also bringing in notoriety. Although the end of the tech boom left the Nasdaq and NYSE behind the Chinese markets in the global ranking of IPOs, the New York Stock Exchange continued to lead the way in raising capital, with a total of $133 billion in This year.

"As the IPO market begins to open, we look forward to receiving a robust line-up of companies," said Michael Harris, the NYSE's global head of capital markets, as quoted by the FT.

• Arm shares rose 25% in the first day of trading on the Nasdaq

Arm's Nasdaq IPO was the largest in almost two years. The company's shares rose 25% in the first day of trading, the FT notes.

"We are proud to remain the preferred exchange for the world's most innovative companies, with a gain rate of over 88% over the past two years," said Karen Snow, head of global listings at Nasdaq, referring to the number of companies listed on this market.

Nasdaq's lower listing fees and costs mean many smaller companies are choosing to list on the market, including capital-hungry biotech groups that frequently turn to the market for funds.

Competition for listings remains tight between the two US markets in 2023, according to the source, who said that in addition to Instacart's Nasdaq debut, digital marketing group Klaviyo is set to price its NYSE IPO this week. through which it wants to raise about $500 million, and German shoe maker Birkenstock is expected to offer up to $1 billion in shares on the NYSE in the coming weeks.

• FT: Single listing fee at Nasdaq - $270,000, and at NYSE - $295,000

Nasdaq charges a one-time listing fee of $270,000, compared with $295,000, the fee charged by the NYSE, according to the FT. Annual fees depend on factors such as the number of shares outstanding and whether a company has sold additional shares to raise new funds. The exchanges also offer some ancillary services in support of the listing, some of which may be part of the listing negotiations, according to the people involved cited by the British publication.

Companies that list usually meet with officials from both exchanges before making their choice, according to the FT.

"Investors and issuers associate certain industries with one or the other of the two exchanges," says Jeff Cohen, a partner in the capital markets division of Linklaters' New York office, noting: "This is often the deciding factor in the choice because issuers believe that it will influence the assessment".

Nasdaq made $729 million in revenue last year, or just over a tenth of the total, from data and listing services.

The NYSE, part of the Intercontinental Exchange since 2013, earned $515 million from listings, less than a tenth of the revenue from ICE's broader markets business, which also includes energy futures and options, agricultural and financial.

In the past week, three listed companies have transferred to Nasdaq from the NYSE. These include delivery app DoorDash, whose $3.4 billion IPO in 2020 was the second-largest that year in that market. DoorDash offered no reason for the move other than joining the tech company community.

While Nasdaq counts 11 companies that have moved to its platform this year, after 14 last year, the NYSE reports that 14 companies have moved to its market from Nasdaq in 2023, after 34 that moved moved to 2022 - the highest number in the last two decades.