Page 25 - ARUBA TODAY

BUSINESS Tuesday 20 augusT 2019
A25

Where’d all the stocks go? Nasdaq’s CEO on shrinking market

By STAN CHOE I would say that when I
Associated Press look back on some of the
NEW YORK (AP) — The true bubbles that existed,
stock market is a much less I would not say I feel
crowded party than it used like we’re in that kind of
to be. environment.
In the late 90s, when a bevy I think people see these
of hot dot-com companies companies come out,
were rushing to sell their and they can see a big
shares on public markets, total addressable market.
investors had more than They can see how these
7,500 U.S. stocks to choose companies could grow
from. The dot-com bust and change an industry
culled many of those and maybe even change
stocks, though, and the the world. And I think they
number has continued to see an optimistic view
shrink steadily, now down as to what the growth
more than half from its 1998 characteristics of the
peak. economy are. And they
That’s doing a disservice couple that with: What are
to the typical investor, says my alternatives?
Adena Friedman, chief My alternatives are really
executive officer of Nasdaq, low interest rate debt.
who spoke recently with Other asset classes just
The Associated Press about don’t yield the same kind
how it can make income of return.
inequality worse. She also I would say there’s more
touched on how trading foundation behind what
markets are striving to open In this Wednesday, July 31, 2019, photo NASDAQ President and Chief Executive Officer Adena we’re experiencing today
up to the world, even as Friedman poses for a photo at NASDAQ headquarters in New York. than there was, certainly
politicians push for more Associated Press at the height of the internet
insularity. The conversation bubble.
has been edited for clarity for their education or their investors access to some interesting companies — Q: Nasdaq is making a lot of
and length. kids’ education — those great companies, but Intel, Applied Materials, investments in technology,
Q: What’s behind the investors don’t get the some of them — a lot of the Comcast and Paccar — and its technology is used in
shrinking number of stocks? chance to invest in those bigger tech companies — those four companies went markets all over the world.
A: Companies are taking companies early in their life. are later in their life cycles. public in our first class of Can you point to some
a lot longer and waiting They miss out on the growth So they’ve already gone listings, and all of them are of the more interesting
to go public. A big part of and the opportunity that through a big growth wave in the Nasdaq 100 today. examples?
the reason is that there are those companies provide. before the public investors They were not profitable A: Our technology today is
other sources of capital And that, I think, is what we get a chance to invest in companies, but they were used in 130 markets around
that they can use to drive really have to pay a lot of them. building scalable profitable the world. Our job is to allow
growth in their companies. attention to as a society: Q: A lot of IPOs recently companies that were other markets to create a
Private capital is just making it more attractive have been for money- changing the world. fair and mature experience
incredibly abundant and for companies to go public losing companies, and I believe that the public for their capital markets.
readily available, and there and making it so more critics say it’s reminiscent market should be for The Indonesia Stock
are early-stage investors investors have a chance to of the dot-com bubble. Is companies to discuss their Exchange uses our trading
who are willing to take a invest in that growth. there such a thing as too story, back up their story technology, our clearing
lot of risk to get into these We always say markets many IPOs? with numbers and facts technology and our
growth companies. are the most democratic A: No. and figures, fully disclose surveillance technology.
So they have more part of the capital market Nasdaq was formed in the opportunities and the They’re creating a good
choice. Then the rules of system — any person can 1971, and we founded risks of the company and let market for foreign investors
the government made it come in and invest $100 our listings business on investors decide: Do they to come in, and it allows
possible for them to have and find a company that one premise: We wanted have a scalable business them to focus on educating
more shareholders as a they really want to buy or younger companies to model that will grow to their local citizens on how
private company than an ETF or any sort of any be able to tap the public profitability, or don’t they? to become investors.
they used to. They weren’t investment, and they all market. So before Nasdaq Don’t make it so that the But our technology is
forced into the public have equal access to the was created, you had company already has to also applicable outside
market based on just having markets. That’s not the case to already be successful have reached a certain the capital markets. We
too many shareholders. for private companies. before you could actually point before a public have technology that is
They’re going to wait It’s really reserved for the get public investors to help investor even gets the used to support certain
until they feel like they’re wealthier parts of society. grow your company. You chance to invest in it. sports betting. We have a
mature enough to handle Q: Do all these recent high- had to be profitable, and Q: The stock market is platform that’s used by the
the disclosure obligations profile IPOs, like Lyft’s and you had to have a record close to a record high, Hong Kong Jockey Club,
and the scrutiny associated Uber’s, mean the trend is of profitability, and that and this has been the it’s used by the Australian
with going public. shifting? held back thousands of longest running bull market racing authority and we’re
Q: And that’s a bad thing? A: We do have companies companies from being able on record. Does it feel to deploying it into Sweden as
A: The net result is that a that are coming out and to use the public markets you now like it did at prior well.
lot of what I call average going public. We had 189 to grow their companies so peaks, like 2007 before the We know how to run
investors — people IPOs last year. We’ve had that they could become Great Recession or 2000 complex auctions, so our
who are saving for their almost 100 IPOs this year. So profitable. before the dot-com bust? technology can be used
retirement, who are saving we know that we’re giving I can name some really A: I don’t try to compare. there as well.q