Coke vs. Pepsi. Apple vs. Microsoft. Energizer vs. Duracell. All are great brand rivalries. Today we look at one of the biggest rivalries in the capital markets space: NYSE vs. Nasdaq. And ever since the Nasdaq debacle with the Facebook IPO, the rivalry has only intensified.
Companies going public face lots of decisions including where to list their shares. Ever since the dot-com craze of the late 1990s, the rivalry between the NYSE and Nasdaq has been fierce. Each exchange attempts to woo each other’s clients to switch their listing. In fact, some big names have changed exchanges over the past year. Texas Instruments and Viacom switched from the NYSE to Nasdaq in 2011. Earlier this year, TD Ameritrade left Nasdaq for the Big Board, but Nasdaq countered by poaching Kraft. Nasdaq (with its history of winning the listings of technology companies) and the NYSE have been fighting hand-to-hand in the technology company space with Groupon and Zynga choosing Nasdaq and LinkedIn and Pandora going with the NYSE. So is one exchange better than the other? This post will examine some of the most important factors you should consider in making your decision.
Historic Differences. The NYSE started operating in 1792 while Nasdaq started up in 1971. The 200 year head start by the NYSE led to a couple of differences initially, but these changes have largely disappeared over the past decade. Nasdaq has no physical trading floor; it is 100% electronic. Because the NYSE operated without the assistance of computers for the bulk of its existence, it has a physical trading floor; however, since 2007 virtually all NYSE stock can be traded electronically. One of the other major differences went away in 2008 when the SEC began allowing Nasdaq-listed companies to have one-, two- or three-letter ticker symbols. Historically, all Nasdaq-listed companies needed to have a four letter trading symbol. (Zillow was the first Nasdaq-listed company to take a one-letter trading symbol, “Z.”) The ticker change followed Nasdaq’s conversion from an interdealer quotation system to a licensed national exchange in 2006, which from an issuer’s perspective, had little to no effect other than to further legitimize the then 35-year old “upstart” Nasdaq.
Branding and Marketing. The biggest difference between the two exchanges is the public’s perception of the exchanges. Nasdaq with its upstart image and all electronic trading platform has attracted more technology-based companies, many of which did not qualify to list on the NYSE when they originally went public. The Big Board, on the o Continue Reading Where to list: NYSE or Nasdaq?