NYSE Vs. NASDAQ

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NASDAQ and NYSE have been big competitors on the Stock Exchange market for a long time now. It is an everlasting debate to decide which of these are better and how one of them outperforms the other.

Lately, it has been noted that an increasing number of listings including the SucessFactors have been transferred from the NASDAQ to the NYSE. When Scott Cutler, the executive vice president at the NYSE, was asked to comment on the situation-he was quick to slam the on-goings as a ?complete crushing? of the NASDAQ.

Apparently, many others didn?t take well to Cutler?s ill-advised words as they were later criticised by interested parties and people that labelled articles published in his favour as ?one-sided?.

Along with differences in firm characteristics, differences in firm?s corporate agenda and activities may also influence their decision to move to NYSE. Some firms believe that they under-go increased liquidity, arising from the move to NYSE, and is associated with a lower cost of capital.

Representation

NYSE represents 66% of the technology IPOs in the first quarter of the year. Every single private equity firm?100%? listed on the NYSE.?Almost 18 have come from NASDAQ since January 2010.

IPO

Daneil Hom, a data analyst at Tableau Software, decided to look at this year?s IPOs and compare their performance across exchanges. His findings showed that The NYSE does win in many areas, which does not come as a surprise considering it has been dubbed ?the world?s largest stock exchange?- but the average IPO that lists on the NYSE does not.

Looking at various reports that compare NASDAQ and NYSE performances, it shows that the average company listed on NASDAQ performs better than it would on the NYSE.

However, it is interesting to note that NYSE IPOs do outperform the NASDAQ?s in tech. This may not be good news for NASDAQ, as it is known to be home to many tech giants such as Microsoft, Cisco, Intel, Oracle and Sun Microsystems.

So far, roughly equal numbers of companies, about 54 according to the exchanges? figures, have switched, when moves from NYSE and NYSE Amex are totalled and compared to moves from Nasdaq.

Movers

By far the largest single move, as measured by market capitalisation, was Vodafone, the London-listed mobile telecom group, which moved its American depository receipt shares from NYSE to Nasdaq in 2009.

Vodafone?s current US market capitalisation is $147bn. The second biggest move was DirectTV, which has a current market capitalisation of $36bn.

Recently, Imax moved its listings from NASDAQ to NYSE, Dolby Laboratories is also listed in the NYSE.

Some companies, like Charles Schwab, have switched twice, moving to NASDAQ from a dual listing in 2005 before moving its listing to only NYSE last year.

Could these newfound differences between NASDAQ and NYSE be because of different listing requirements? Or could they be the result of the NYSE?s more established reputation? Both companies are equally competitive, this means that investors can buy and sell shares in the two companies. Both trade on themselves.

Sources: blogs.forbes.com, www.investopedia.com, www.ehow.com , www.ft.com, kedia.rutgers.edu,

 

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