Despite intense competition from the NYSE, market experts say NASDAQ remains the favored listing venue for tech companies
Months of speculation are coming to an end. Although the announcement has yet to be formalized, Facebook is reported to have selected its stock exchange – and it’s NASDAQ.
This concludes what is likely the fiercest battle for an individual listing between the victor and its downtown rival, the NYSE, in years.
More than the fees from the listing itself, NASDAQ’s reported win comes with prestige that can be used to draw in other IPOs.
So why did Facebook choose NASDAQ? The answer may provide a sense of whether the contest is shifting, with several other tech and social media IPOs waiting in the wings, including Kayak and Glam Media. Twitter and Dropbox could follow later.
Market experts point out that, despite the NYSE and NASDAQ battling hard for tech listings, NASDAQ has retained much of its reputation as the sector’s premier listing venue.
Lou Kerner, founder and analyst at the Social Internet Fund, which invests in the primary and secondary shares of social media companies, puts it succinctly.
‘I think Facebook wants to be the largest tech company in the world,’ he says. ‘If you look at the companies it’s gunning for, the first is Google and next is Apple. And they’re both on NASDAQ.’
Even though the NYSE ‘has made inroads with tech companies, the biggest are still on NASDAQ,’ Kerner adds.
The NYSE picked up some high-profile listings last year, including LinkedIn and Pandora, but NASDAQ won Groupon, Zynga, Jive Software and Zillow, among others. It’s also home to Microsoft, Cisco and Intel.
‘The perceptions of both exchanges have continued to evolve,’ says David Collins, managing director of Catalyst Global, a corporate communications firm.
‘NASDAQ continues to be thought more of as the tech-oriented, more youthful, aggressive exchange.’
The investment community, however, isn’t as concerned with where a company lists, according to Victoria Sivrais, senior vice president of strategic communications at FTI Consulting.
‘One of the largest contributing factors to Facebook’s decision to list on NASDAQ was likely not driven by an investment community preference,’ she says.
‘Despite past perceptions associated with listing on NASDAQ or the NYSE, today the Street does not have a strong opinion one way or the other about where a corporate issuer decides to list its stock.’
Facebook was contacted for this article but did not want to comment due to its quiet period. NASDAQ did not respond to requests for comment.