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NASDAQ has had an eventful year of company listings and now looks set to outperform crosstown rivals, the NYSE, for IPO listings in 2021.
NASDAQ Inc (INDEXNASDAQ: .IXIC) may rival the NYSE (New York Stock Exchange) regarding the number of IPO (Initial Public Offerings) listings offered this year. Generally, hundreds of companies have raised a record amount of capital in the United States via new stock flotations. This year alone, 686 companies listed on the NASDAQ, generating $191.38 billion in the same period. Comparatively, the NYSE saw a much lower number of listings for 2021 at 265, and raised $109.25 billion. Although 2021 still has a few weeks left to run out, NASDAQ is in such a commanding lead.
NASDAQ and NYSE IPO Offerings
The NYSE used to dominate its crosstown rival the NASDAQ for new IPO listings in the years leading up to 2019. However, there were a handful of years that differed, most especially during the internet bubble. Now in 2021, NASDAQ stated that it could finish the year with the highest number of US exchange listings in 20 years, with 4,133 listings, including operating companies, special purpose acquisition companies (SPACs), and exchange-traded funds (ETFs). In addition, SPAC IPOs made up $96.76 billion of the total value at NASDAQ, while traditional IPOs did $94.63 billion. By contrast, the NYSE did $56.27 billion for SPAC IPOs and $52.9 billion for traditional IPOs.
Nasdaq won 63% of all raised proceeds in 2021 SPAC IPOs, a 61.5% increase from last year’s figures. Regardless, the NYSE considers its records impressive. According to an NYSE spokesman:
“This has been a tremendous year for new listings at the New York Stock Exchange, setting our second-straight record for proceeds raised and welcoming many of the world’s most innovative and well-governed companies to our NYSE community.”
NASDAQ was propelled by a substantial number of high-profile stock market debuts. A standout example is that of Rivian Automotive Inc (NASDAQ: RIVN), which turned out to be the largest IPO of the year at $13.7 billion. The American electric vehicle automaker and automotive technology company had the backing of US tech giant Amazon – and plans to develop a network of charging stations across the US and Canada.
Other NASDAQ IPOs included the debuts of prominent brokerage platform Robinhood Markets, renowned doughnut chain Krispy Kreme, and the Bumble dating-app platform.
Analysts Say NASDAQ’s ESG Outlook Played a Key Role
According to IPO advisory companies, a driving factor that helped NASDAQ was its shift to focus on environmental, social and governance (ESG) criteria. In so doing, the multiple dealer market was able to attract companies led by younger and more ESG-focused management teams.
The securities and exchange commission (SEC) greenlit a change to NASDAQ’s listing rules earlier this year in August. This was to compel companies to seek increased gender and racial diversity on their boards. However, this decision met some resistance as NASDAQ executives stated that some companies complained about this. In addition, Republican lawmakers and conservative groups also voiced their displeasure, with the groups filing lawsuits.
Generally, US IPOs have now hit a total of $301.26 billion in 20221, according to Dealogic. This is an increase of more than 79% from the $168 billion recorded in 2020.