“Going public” used to mean only one venue decision – NASDAQ or NYSE?
Everything else was denigrated as a “regional exchange”.
In the past that tended to mean a lower valuation, as you were restricted to only local investors. Or you needed sophisticated investors using tools that could normalise valuations into a single reference currency.
That was yesterday’s story. As we are now 20 years into the Asian century and with America and China in something like a cold war, the trend is towards Chinese companies listing in Shanghai or Hong Kong or maybe in Dubai to access oil wealth.
That will make regional exchanges more of a real option. Tools that can normalise valuations into a single reference currency will become common. You could build a portfolio of stocks on exchanges in Asia, Europe, America, Middle East, Africa and have the whole portfolio values in a currency of your choice.
NASDAQ and NYSE will see real competition from regional exchanges in their rear view mirror. If they look a bit further back they will also see competition from Security Tokens, which can be settled in real time, making them way more efficient than legacy exchanges. The SEC approved INX IPO on Ethereum points to this being a viable option.
Or you can find a regional exchange that can deliver crypto like settlement efficiency, like the Australian Stock Exchange (ASX). Daily Fintech covered how ASX is using blockchain to deliver real time settlement here.
It will be interesting to see where global ventures, such as Revolut, choose to list.
Macro trumps venue. Where you list your equity – as a Security Token, or on NASDAQ/NYSE, or on a regional exchange – makes a difference. However the state of the macro environment will make a bigger difference. Which is the subject of next week’s post on Fintech driven market structure changes may explain how the stock market is behaving at the macro level.
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