In the race for initial public offerings (IPOs), Nasdaq has bypassed the New York Stock Exchange (NYSE) during the coronavirus era, according to a report from The Wall Street Journal (WSJ).
As with every aspect of American life, the pandemic has slowed activity on the trading floors and stopped corporate debuts, but Nasdaq has raked in $12.2 billion from 44 companies going public this year through to Friday (June 5). That beats out NYSE's $10.9 billion from 27 companies up to that date, according to WSJ citing data from Dealogic.
The race has been close, with Nasdaq behind NYSE for much of the year, until a couple of high-profile debuts took the stage, such as Warner Music Group, which raised more than $1.9 billion and is the current largest IPO of 2020 to date, according to WSJ.
And, pharmaceutical company Royalty Pharma began touting its forthcoming IPO to possible investors, intending to raise $1.9 billion at the midpoint of its target price range. Royalty intends to list on Nasdaq, according to a regulatory filing, WSJ reported.
The NYSE could pull ahead of the pack again, though, with a large IPO from grocery retailer Albertsons slated to list on the exchange and used-car marketplace Vroom expected to list there, too, WSJ reported.
Both NYSE and Nasdaq make their money through collecting companies' listing fees, among other revenue streams. Nasdaq is typically more affordable for companies through its cheaper $159,000 annual fee cap for number of shares outstanding. In contrast, NYSE fees can run up to $500,000, according to WSJ.
NYSE executives contended that it's "misleading" to judge performance only on the money raised through IPOs, though. The executives told WSJ a broader metric, including "follow-on offerings by listed companies and new listings of closed-end funds," would show NYSE ahead of Nasdaq.
Companies considering going public in 2020 were all shaken by the coronavirus pandemic, with companies tightening their belts and watching their spending, unwilling to take risks during the pandemic's tumultuous economy. As such, the number of IPOs this year has been lower than any of the past four, with 34 companies raising $9 billion.
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