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We saw all the festivities at MarketSite and Times Square for Nasdaq's IPOs last year from Roku to Stitch Fix. Can we expect a busy IPO market in 2018?
It's always an incredible experience to host a company on their first listing day. This year we welcomed 136 IPOs, surpassing 91 in 2016. We are optimistic about the IPO environment with the U.S. market and all major indexes including Nasdaq Composite and Nasdaq 100 hitting all-time highs. While the IPO climate is relatively lukewarm compared to our historical average, we do expect a healthy pipeline for 2018, particularly in healthcare, technology and financials.
We've seen growth oriented companies like Roku doing well following their IPO which indicates a positive investor reception towards technology deals. Today companies have more options and a more flexible timeline in their plans for going public, and some may consider either M&A or staying private longer as an alternative.
In addition to IPOs we are also seeing a strong momentum in switches and SPACs, what have you seen in the listings business?
We often say that being a public company is a marathon and not a sprint. Crossing over $1.2 trillion dollars in market cap from companies switching to Nasdaq from the NYSE speaks to our unmatched value proposition, market model and visibility assets. 2017 was an exceptional year as we welcomed companies from multiple sectors joining the Nasdaq family, including the largest exchange switch to date - PepsiCo, Inc. ($165.8B market cap), as well as Principal Financial Group ($20.6B market cap), Workday ($21.8B market cap), Brookfield Property Partners ($15.4B market cap) and Xcel Energy ($25.7B market cap). Since 2005, Nasdaq listings transfers included other household names such as T-Mobile, CSX, Kraft Heinz, Marriott, Walgreens and many others. We are in talks with a good number of companies and hope to have more news to share soon.
Special Purpose Acquisition Companies (SPACs) listings have become a popular avenue for a company to access the public market. Since the adoption of new listing rules in 2011, Nasdaq has consistently been the exchange of choice for SPACs, attracting 96% of all SPAC IPOs listing on a national exchange. Some of our notable SPAC listings this year include Silver Run Acquisition II (SRUN) / $900M, Vantage Energy Acquisition (VEAC) / $480M, Federal Street Acquisition (FSAC) / $400M, Gores Holdings II (GRSH) / $375M and Kayne Anderson Acquisition (KAAC) / $350M.
What is Nasdaq doing to advocate for companies and investors, specifically as it relates to market regulations?
Nasdaq is leading the charge to improve the ecosystem for publicly traded companies. We're committed to reducing some of the burdens companies experience when going public, while creating a favorable environment for long-term investors. The Revitalize blueprint that launched this summer lays out our effort to encourage a dialogue and invoke change to simplify the current maze of regulations and revise the outdated rules governing market structure to better support the needs of participants. By doing so, we are creating an environment that allows companies to focus on long-term growth rather than short-term performance, which will benefit corporations, investors, workers and the entire US economy.
Small and midsized companies lack necessary support from the public company ecosystem. Tax reform is one of the most pressing and timely issues at the forefront of the complex regulations facing public companies. US corporate tax rates are among the highest in the world, impacting our companies' ability to compete. We support the administration's efforts to lower taxes and allow corporations to repatriate overseas cash. Without reform, the 20% decline in US public companies over the past dozen years may well continue, hurting investors and the overall economy. We feel the time is right to lead this conversation.
Nasdaq is a very different company today compared to the one you joined in 2001, could you talk about the transformation and changes?
Two things that have not changed are our commitment to our listed companies and our drive to lead innovation in capital markets. In 1971, we began primarily as a U.S.-based equities exchange. Today, Nasdaq is recognized around the globe as a diversified worldwide financial technology, trading and information services provider to the capital markets.
For over 40 years, Nasdaq has pioneered new technologies that have supported-and driven-changes in financial markets. I think a good example of our transformation is the Nasdaq Private Market (NPM), which we created to help privately-held companies facilitate shareholder liquidity and manage their equity on their own terms. Earlier this year, we expanded our technology solutions to address challenges of liquidity in alternative investment funds. NPM' Alternatives allows fund managers providing liquidity to their investors, creating opportunities for new product vehicles and expanding access points to new sources of capital, while maintaining control over the investors permitted access to its funds.
While Nasdaq has undergone transformative changes, entrepreneurial spirit is always in our DNA and a vital part of who we are. Our business evolves constantly and we have become more than just a listing venue, we've become a strategic partner to our clients and continue to identify potential opportunities to help address our clients' needs and challenges in in an innovative way.
What is one thing you think all successful entrepreneurs have in common?
All successful entrepreneurs have discipline and persistence and are not afraid to take risks. Today's successful entrepreneurs are innovators, thinkers and artists across disciplines. It's amazing the growth of the companies today's entrepreneurs have created, and I'm looking forward to partner and work with the next generation of leaders.
At Nasdaq, we're passionate about grooming the next generation of innovators. Through the Nasdaq Entrepreneurial Center in San Francisco, we have supported more than 3,000 entrepreneurs from all industries and stages of growth. It is our mission to leverage our ecosystem for entrepreneurs - our issuers are an important part of that ecosystem, and we encourage participation in programming and mentorship.
You must have traveled significantly for your works with issuers and investors. Where are you heading next?
World Economic Forum at Davos. I will be speaking on a panel to discuss the role of Chairmen as intermediaries between market forces, investors and the companies they oversee. Specifically, how we can encourage and promote more long-term oriented financial markets - where companies can focus and invest in long-term growth, job creation and innovation. We have a strong history of working on the issues that affect public companies and one key element in Revitalize is to promote long-termism.
Robust and efficient disclosure promotes transparency which is critical to our markets. However, based on our conversations with the industry, disclosure requirements are frequently referenced as main challenges, particularly for small and medium growth companies. We propose to evaluate some of the regulations to reduce the cost and burden for smaller companies, while maintaining the level of access and details that investors need. I very much look forward to opportunity to help address the tension between short-term market pressures and long-term strategy, creating a healthier business environment that works for all market participants.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
