Nasdaq's Snow Sees Healthy Pipeline for IPOs in 2024

Show Transcript
Bloomberg Mar 29 02:41 · 11.9k Views

Karen Snow, Nasdaq's global head of listings, says the second quarter will be healthy for initial public offerings and expects artificial intelligence to be a game changer. She speaks with Alix Steel and Romaine Bostick on Bloomberg Television.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more

Transcript

  • 00:00 Help us understand the pipeline for Q2 for IPOs, what do you see?
  • 00:04 Well, the pipeline for 2024 is healthy.
  • 00:07 Q2
  • 00:09 we will see.
  • 00:10 I think a lot depends on
  • 00:12 continued signaling from the Fed.
  • 00:15 You know the market is expecting rates to start to decline in June.
  • 00:20 And when we look throughout the year and the cadence of the the, the,
  • 00:25 the new issue market, I'd say Q2 will be healthy.
  • 00:29 When we look at Q1, I can say that compared to last year,
  • 00:34 the new issue market has issued over 2 1/2 times
  • 00:38 with
  • 00:39 about a $9 billion raise so far this year.
  • 00:42 Karen, you got some good, you got some bad.
  • 00:43 On the one hand, we have very strong growth.
  • 00:45 We saw that come out for the revision, third revision for the fourth quarter, right.
  • 00:50 Growth is really good.
  • 00:51 You missed survey really strong.
  • 00:53 But then you have that persistently high rate from the Fed that may actually get pushed out, those cuts might get pushed out.
  • 00:59 What is that set up
  • 01:00 due to the IPO market?
  • 01:03 Well, what I would say is that the new issue market is doing well
  • 01:08 and delivering great returns right now because
  • 01:12 investors are looking for new ideas.
  • 01:15 The markets have recovered pretty meaningfully from the lows up, you know over 100 plus percent many cases.
  • 01:23 And
  • 01:24 because they're looking for these new ideas,
  • 01:27 they're willing to step into
  • 01:29 the right transactions that they think will do even better when rates come down.
  • 01:35 I am curious Karen, about kind of the complexion of the potential
  • 01:39 listings that we could see going forward.
  • 01:41 One thing that I thought was interesting, towards the end of last year, we started to see or at least here
  • 01:46 in the media about a lot of foreign companies
  • 01:49 that we're finally looking for an opportunity to come to the US market.
  • 01:52 Alex mentioned Estera Labs, so that we got one there and there's a few other high profile ones that are kind of circling around.
  • 01:58 Do you think that's going to be a big driver of business this year?
  • 02:02 It'll be a driver.
  • 02:03 We also had
  • 02:04 Caspi, which was the first
  • 02:06 company to issue in the
  • 02:08 US from Kazakhstan.
  • 02:09 It was a dual listing and they raised a billion
  • 02:12 in capital that came in January and there's a lot of conversations happening right now with companies who are looking to access the US markets.
  • 02:19 I think it's pretty well understood globally
  • 02:22 that the
  • 02:23 US
  • 02:24 has the ability to really drive people's valuation in a way that
  • 02:28 it can't happen in on the on other markets.
  • 02:30 Is that a switch from maybe what we were seeing a few years ago when China was still a relatively healthy
  • 02:35 capital market and you had some other options out there where people were maybe saying,
  • 02:39 OK, do we necessarily need the NASDAQ or the NICE or basically the USI should say,
  • 02:44 yeah, I would say that the
  • 02:45 US
  • 02:46 has the deepest pool of liquidity, the most investors and very sophisticated investors who understand how to value companies
  • 02:55 and
  • 02:56 companies have caught on to that.
  • 02:58 And when they start to compare
  • 03:00 the different marketplaces,
  • 03:02 the US looks attractive.
  • 03:05 Do
  • 03:05 you have a successful IPO?
  • 03:07 And I guess that we have to figure out what successful actually means.
  • 03:10 But to get an IPO out, do you have to have a tie to AI?
  • 03:15 No, you don't have to.
  • 03:16 But I would say it is a big trend right now that everyone's talking about.
  • 03:20 And to be honest with you, so many companies, whether they are powering AI
  • 03:26 or using AI, it is a big part of the story in terms of productivity.
  • 03:33 Everyone does seem to have an angle on it
  • 03:35 in some way.
  • 03:37 And
  • 03:38 I do think it is going to be a real game changer for the economy.
  • 03:42 When you think about overall growth here, do
  • 03:44 you think that that means we're going to see more technology, IPO's or where the sectors that you think will see the most action?
  • 03:50 Well, I do tech for sure.
  • 03:52 We are seeing a big bounce back in biotech, which is wonderful to see.
  • 03:57 There's been 9 transactions year to date.
  • 03:59 All have traded quite well.
  • 04:01 So
  • 04:02 that's really exciting to see.
  • 04:03 We're seeing more consumer
  • 04:05 as well as little energy,
  • 04:09 industrial, fintech.
  • 04:11 So it's pretty broad based in terms of the pipeline.
  • 04:14 It's really a matter of when people feel comfortable accessing the market
  • 04:20 and a lot of people are out on the road right now doing testing the waters, getting that feedback and determining whether they should go
  • 04:27 before the election or after the election.
  • 04:30 Is that a factor?
  • 04:30 Normally, Karen, in normal years with regards to election cycles, is that kind of squash things for a couple of months?
  • 04:37 Probably not a couple of months, but it will
  • 04:40 drive probably volatility in the marketplace.
  • 04:42 And when you have increased volatility, that's not great for the new issue market.
  • 04:47 But what I'd highlight is something you've talked about a little bit earlier.
  • 04:50 The economy is really strong right now
  • 04:53 and that's what matters most for all of these companies.
  • 04:57 And at the end of the day, as these companies do make this decision to come to.
  • 05:00 Market.
  • 05:00 Karen, I do just have to ask you
  • 05:02 about the competition you have with
  • 05:04 your folks down in lower Manhattan there.
  • 05:06 I mean what is the prospect here?
  • 05:08 I mean there used to be some pretty significant differences between the NASDAQ and the nicey and why one company would choose one over the other.
  • 05:15 Do those differences still exist?
  • 05:17 They do.
  • 05:18 And what I would say for NASDAQ and current trends and what you're talking about in terms of AI and biotech and
  • 05:26 and other
  • 05:27 people want to be aligned with innovation and growth
  • 05:30 and we're very fortunate to be the brand
  • 05:33 where people find that alignment.