NYSE, Nasdaq Battle for New Listings

The fight between the New York Stock Exchange and Nasdaq to win new stock listings is raging again, in another sign the market for initial public offerings is perking up after a long slumber.

The Nasdaq recently won grocery-delivery company Instacart’s listing, set to take place before year-end, according to people familiar with the matter. The exchange also successfully wooed Arm, the big chip designer. NYSE snagged the listings of marketing-automation platform Klaviyo and trendy German shoe manufacturer Birkenstock.

Exchanges make money each time a stock they host changes hands, but trading volumes are unpredictable. Listing fees, by contrast, are stable, and can add up to as much as a half-million dollars a year per company. Winning big listings confers coveted bragging rights. 

Nasdaq and NYSE compete for all big IPOs, using inducements such as expensive marketing and advertising packages, fancy coming-out parties and opening- and closing-bell ringing privileges. To woo Arm, likely to be the biggest IPO of the year, Nasdaq promised the British company a package valued at $50 million, according to people familiar with the matter. 

The IPO market has been in a prolonged slump, with companies raising the least amount of money in 2022 through traditional IPOs in at least two decades. Early 2023 was also slow, with companies and investors steering clear of IPOs, in part because of higher interest rates and inflation that have made other investments more attractive.

While that temporarily quieted the listing wars, in recent months they have started to pick up again.

The NYSE currently has an edge over its rival. So far this year, traditional IPOs on the exchange have raised roughly $6.5 billion, surpassing the $3.7 billion raised on Nasdaq, Dealogic data through early August show. If that pattern persists, the NYSE will break Nasdaq’s four-year winning streak.

Recent hot IPOs include that of Mediterranean restaurant chain Cava Group, which doubled in its debut on the NYSE in early June.

The coming crop is bigger, and bankers, lawyers and investors say it could pave the way for a steady flow of new issuance in 2024.

Arm, Klaviyo and Birkenstock could debut as early as September. Arm plans to seek a valuation of more than $50 billion, while Birkenstock is looking for more than $7 billion. Klaviyo is likely to target more than $5 billion, according to people familiar with the matter. Instacart recently updated its internal valuation to around $12 billion.

—Jaewon Kang contributed to this article.

Write to Corrie Driebusch at [email protected] and Laura Cooper at [email protected]