initial public offerings (IPOs) trading on American exchanges

Friday, January 21, 2011

NYSE woos Silicon Valley to catch next wave of listings

The New York Stock Exchange has its eyes set on Silicon Valley, where a wave of technology companies such as Facebook, LinkedIn and Zynga are expected to go public over the next 18 months.

NYSE missed out on the first internet boom, with Ebay, Amazon and Google all choosing to list on the Nasdaq, NYSE’s chief rival. Those companies built the Nasdaq’s reputation as the de facto home for public tech groups.

Now NYSE is looking to avoid making the same mistake twice. It has embarked on a major marketing campaign in Silicon Valley, where many tech companies are based.

It has bought billboard advertisements along Highway 101, the main thoroughfare between Silicon Valley and San Francisco, and has doubled the size of its Silicon Valley capital markets team, which works to attract new listings.

“The old NYSE was not even pitching businesses in Silicon Valley,” said Douglas Chu, head of NYSE’s western region. “We just assumed that when they got big enough they would come over. That never happened.”

Nasdaq is still the preferred home for new US tech listings. Last year, Tesla, the electronic car maker, chose to list on Nasdaq, even though GM and Ford are on NYSE.

Nasdaq has already won listings from Skype and Kayak, whose IPOs are also anticipated later this year.

Nasdaq has long had a presence in Silicon Valley, with offices on Sand Hill Road and San Francisco.

It touts its corporate services, such as web-based seminars for executives working at public companies for the first time.

While listing fees for smaller companies are similar, for bigger companies Nasdaq caps fees at $99,500 a year. NYSE fees can be up to $500,000.

“It’s not about the bell ringing, it’s about what happens when the bell stops ringing,” said Bob McCooey, head of listings at Nasdaq.

Last year NYSE won 40 per cent of tech IPO listings, its best market share since at least 1995, according to Dealogic.

NYSE recently won the listing for Demand Media, an online content company that is slated to go public on Tuesday. It also boasted the best performing IPO of 2010, China’s, a streaming video web site similar to Hulu.

The intense competition begins years before a company goes public, as exchange executives try to build relationships with entrepreneurs and likely IPO candidates.

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