Nasdaq Sees 2014 IPOs Benefiting From Stock Surge With Tapering

Jan 21, 2014 8:23 am ET

Jan. 21 (Bloomberg) -- Nasdaq OMX Group Inc. said the number of initial public offerings it handles may rise this year, buoyed by strong equity markets and the Federal Reserve’s announcement that it will reduce bond purchases.

Bruce Aust, who oversees listings at the second-largest operator of U.S. stock exchanges, predicted there will be a cluster of IPOs around April and May. There were 126 IPOs at Nasdaq last year, the most since 2007, as an economic recovery propelled markets to new records.

“After we went through the financial crisis when markets weren’t as strong, you saw a lot of dual tracking, where companies looked at the M&A route as well as the IPO route,” Aust said yesterday in an interview at the DLD conference in Munich for entrepreneurs and technology companies. “I think you’re seeing less of that” as the valuations they can receive in public markets are better, he said.

One focus this year will be companies that help people share resources, said Aust, who didn’t name any companies applying for a listing. Examples of the type of business are Uber Technologies Inc. and Airbnb Inc.’s online systems for car and apartment sharing, he said. As the Fed begins to taper its bond-purchasing program, rising interest will flush more funds into the equity market, Aust said.

China, Israel

The Nasdaq Composite Index of more than 2,400 stocks climbed 38 percent last year and has gained 0.5 percent since December. Online advertising company Criteo SA, based in France, has advanced about 18 percent from its IPO price since it was listed on the index at the end of October.

By comparison, the Standard and Poor’s 500 Index advanced 30 percent in 2013 and has retreated 0.5 percent this year.

Nasdaq also has a strategy to serve companies before they decide whether to pursue an IPO. The Nasdaq Private Market platform has received regulatory approval and will probably start in the first quarter, letting companies offer their shares to a limited circle of investors -- for example to employees. That lets Nasdaq get involved with startups even if they ultimately get acquired instead of listing publicly, Aust said.

The platform will start with about 10 to 12 companies and Aust said he would be satisfied if it reaches between 25 and 50 by the end of the year.

Public listings at Nasdaq last year included telecommunications equipment maker Commscope Holding Co., security-software maker FireEye Inc. and online advertising company Rocket Fuel Inc.

Europe will probably see about 10 technology IPOs for Nasdaq this year, compared with about five to six in China and five to seven in Israel, Aust projected, based on current discussions with companies.

Businesses reported to be considering IPOs in recent months include London-based Just-Eat, an online food takeaway service, and Stockholm-based Spotify, an online music service.

--With assistance from Ruth David in London. Editors: Robert Valpuesta, Kenneth Wong