For nearly 20 years, companies listed on the New York Stock Exchange (NYSE) have steadily transitioned to Nasdaq. This year marks a significant milestone for Nasdaq, with 500 companies, representing a combined market value of $2.7 trillion, making the switch.
Accelerating Momentum in 2024
In 2024 alone, 16 companies, including prominent names like SAIC and Campbell’s, have made the move, reflecting the growing appeal of Nasdaq as a listing destination. This trend signals a broader shift as public companies increasingly recognize the benefits of listing on Nasdaq.
Historical Context and Evolution
The trend gained momentum in 2003 when the Securities and Exchange Commission (SEC) implemented reforms, including the repeal of “Rule 500,” which fostered a more competitive environment for stock exchanges. In 2007, a further rule change allowed companies to retain their existing ticker symbols when switching exchanges, simplifying the process.
Over the past five years, listings transferring to Nasdaq have accounted for more than $1 trillion of the total $2.7 trillion in transferred market capitalization, according to J.R. Mastroianni, Nasdaq’s Head of Exchange Transfers and Listing Services.
Notable Transfers and Market Reach
- Diverse Sectors and Scale: The companies switching to Nasdaq represent 18 countries and 12 industries, with 32 companies boasting market capitalizations exceeding $20 billion.
- Major Names: The transitions include 40 members of the S&P 500, and 24 of these are now part of the Nasdaq-100 index. Campbell’s, the oldest company to transfer, and Linde, with the largest market cap transfer, highlight the breadth of Nasdaq’s appeal.
Why Companies Are Switching
According to Nasdaq, its competitive advantages include:
- Partnership Approach: Nasdaq emphasizes building strong partnerships with listed companies, offering advanced services for investor relations officers (IROs), CFOs, and boards.
- Cost Efficiency: Its fee structure avoids penalizing companies for growth, making it an attractive financial choice.
- Nasdaq-100 Inclusion: The opportunity to join the prestigious Nasdaq-100 Index provides a significant boost in passive investment opportunities.
- Modern Technology: Nasdaq has invested heavily in advancing its backend market structure and execution technology, enhancing stock trading and market efficiency.
Simplified Transition Process
Nasdaq’s commitment to a seamless transition has been a key factor in attracting companies. For example, during its listing transfer, Linde received hands-on support to ensure a smooth process. Juan Carlos Pelaez, Linde’s Vice President of Investor Relations, described the experience as “flawless,” with execution aligning perfectly with the company’s timeline.
SAIC CEO Toni Townes-Whitley, speaking at the company’s Nasdaq bell-ringing ceremony, emphasized Nasdaq’s innovative spirit. She noted, “When I think of innovation, I think of Nasdaq,” underscoring the exchange’s alignment with forward-thinking companies.
The Nasdaq Advantage
As the complexities of operating as a public company grow, Nasdaq’s modern approach, cost advantages, and innovative solutions make it a compelling choice. The exchange continues to position itself as a leader, attracting businesses seeking to optimize their public market strategies.
For companies considering a change, the message is clear: Nasdaq offers not just an exchange but a partnership for growth and innovation.
