Name: Why Going Public Is Looking More Appealing
Uploaded: 2016-07-14
Duration: 1 min 55 s
Description: New York Stock Exchange president Tom Farley explains.

[ SOUND ] [ BLANK_AUDIO ] Our team was very committed to winning the Line IPO, it's a fun company, and I don't know how much you know about it but the engagement statistics are very high. Effectively, if you're a young Japanese person, you're using Line as a number of a Kinda furry animal creature characters that are part of the application. And so our team, we went after it. Gang Busters. Now, I suspect that's only part of it. I think Line was really trying to demonstrate that we're not just a great Japanese company, but we're a great global company. And having that New York Stock Exchange listed, line listed on the New York Stock Exchange. It is certainly helpful. Is it any different than to do a listing in Tokyo? Is there any mechanics in the background? I guess it priced earlier in the week and then it is trading on Thursday so there is more a of gap than we are used to here in the States. Yeah. The mechanics are slightly different but it is nothing unusual. Dual listings are not unusual at all. They are going to raise Around about two thirds of their proceeds in New York on the New York Stock Exchange. Around about one third in Tokyo. Japan does have some, I'll call unusual, but really just some different rules that meant that the IPO priced on Sunday night and the first trade will be in New York on Thursday morning. So what do you think it is about this particular offering that there's so much Demand of these ahead of the offering. They price at the high end of the range. Well you have to go back I mentioned last August, and understand that there have been very few IPOs in the United States or even globally. And so investors are starved for high growth, good companies to be able to add to their portfolio. They're no longer just worried about Selling stocks, and managing their portfolio and redemptions. They're in the opposite mode of where can I put money to work. So companies with a good grow story much like Tulio which IPO of the New York Stock Exchange two weeks ago are in high demand. Yeah, there CEO is here, Brainstorm Tech. And as are many other CEOs of companies that in another era might have already been public. Right and I think that's probably a factor too. You have all these unicorns out there that are staying private. Uber, Lyft, John Zimmer's here. That's probably a factor too. And there just isn't that supply of new companies coming to market for the institutional investor. If you go back two years ago the sense I got from tech entrepreneurs in particular, Was that the disadvantages of being public outweighed the advantages. And that seems to have flipped. And perhaps is because of private financing has dried up to some extent. Evaluations may peak that there. Evaluations are down. That's just a fact. And the amount of capital available Has decreased as well. And so people are really more focused on the advantages of public market, permanent form of capital, a new currency with which to do acquisitions, the additional rigor and discipline that comes along with being a public company. And so that narrative Changed and so I'm more optimistic now about the IPO market ahead than I've been at any point in the last year and a half. So I was going to ask you, do you think Tulio and Line is going to maybe open the flood gates or if not the flood gates, at least open the gates a little bit so that we'll have more activity the second half of the year? I think, I'd be careful to say open the flood gates cause that may conjure up, you know, there'll be 50 tech companies coming to market. It's certainly helpful and if you go back to last August And you look at all those companies that intended to go public, INTECH and else where, that didn't, the numbers up above 30. So, when they get a good sense, when these companies get a good sense, and their advisors get a good sense, yes the market is open. And you can just look. There's multiple IPOs on the road right now that are doing well, there's IPOs that are planning on the road Next week, and there have been successful IPOs in the rear view mirror. We had one day in late May with four IPOs in addition to the Twilio IPO more recently. I think when people start to digest that yes, the markets are open, we're going to have a lot more IPOs overall, including tech, but that isn't to say all of a sudden you're going to have Uber AirBnB and all these exciting names- The big name brands. Go public in the third quarter of this year. [ BLANK_AUDIO ]

New York Stock Exchange president Tom Farley explains.