Capital Markets: Getting listed on Nasdaq

Nasdaq was founded in 1971 by the National Association of Securities Dealers (NASD), now known as Financial Industry Regulatory Authority. On February 8th, 1971, Nasdaq began to be operative as the first digital stock market, owning the quality to be a platform where to be listed more easily than others, such as the NYSE, with lower fees too.

Since the beginning, Nasdaq promoted a big propension including and listing tech firms in its portfolio, as a matter of fact these cover 55,54% of the total composition. Following this, we have the non-essential sector, which covers 16%, the sanitary one with 7,87% presence, the industrial sector covering 4,65%, the financial one and sequentially that of telecommunications, which respectively cover 3,55% and 3,39%.

Browsing through the first 10 titles of Nasdaq based on value and presence, Apple retains 12,53%, followed by Microsoft with 10,98%, Amazon, Nvidia Corporation and Tesla with 6,14%, 5,03% and 3,72%.

As of today, the geographical area where most companies listed on Nasdaq are based, is North America with 6010 companies, followed by 375 in Asia and 311 in Europe for a total of 7030 firms. The smaller presence lies in South America and the Caribbeans. We can note how the total of the non-American firms listed are only 1020, which is 14% of the total listed companies.

Why such disparity?

In general, while other European firms have always shown admiration towards the importance of Nasdaq, hoping to be a part of it one day, the entity has always focused on listing tech firms, which we know are densely present in the USA. Lately, Nasdaq has decided to explore and open its doors across the ocean, looking for new opportunities with geographically far companies and active not only within technology, but with any potential with an international feel, a solid background and a clear path of goals to achieve in front of it.

Let’s see which are the reasons why the european companies could be interested in Nasdaq:

  1. Global recognition and visibility thanks to Nasdaq;
  2. Global expansion: being listed on Nasdaq allows european firms to expand and bereachable by international markets attracting investors from across the globe;
  3. The evaluation potential: the multipliers tend to be higher compared to europeanstock exchanges, and this alone is a significant incentive to access a huge economicpotential along the years;
  4. Diversification of the capital sources: by being listed on Nasdaq, the companies canaccess further capital without relying on banks or letting outside investors in.

Which are the characteristics to keep in mind whenever one would like to list their company?

  1. Regulations: being about a country with different regulations, one need to prepare by getting informed on the local regulations;
  2. Cultural dynamics: the cultural differences, including communication styles and different investor relations, require the european companies to be aligned with the american style;
  3. Communication and time zones: it can sound silly, but the linear communication between Europe and the USA can become difficult given the different time zones.

In conclusion, being listed on Nasdaq represents an advantage and a kick start for companies that want to gain more visibility and simplified access to international investors, bigger evaluation than the european standards and maintaining the ownership and control of the company. With this in mind, the geography will not be a blocker any longer, but something valuable which ensures diversification for both investors and listed companies.

Continue reading from our blog: