Today was a big day for the New York Stock Exchange.
It had the Twitter IPO, which in years past might have gone to the NASDAQ, which has successfully attracted most technology companies that list.
But, the NASDAQ botched the Facebook IPO, and so Twitter decided to go with the NYSE.
On the trading floor today, just about everyone associated with the NYSE was not-so-subtly trashing the NASDAQ process for IPOs.
The entire conversation around Twitter’s opening price was about the “human” element. At the NYSE, they take in all the orders from investors and establish a stable price, then they opening for wider public trading.
This way, according to the NYSE, there is no massive spike, or drop in the stock when it starts trading. And, indeed, that’s what pretty much happened. Twitter opened at $US45.10, briefly jumped to $US50, then settled in at ~$46.
The NASDAQ is different. The orders are submitted electronically then sorted out that way. This process broke during Facebook’s IPO and the trading didn’t start till later than expected. When it did trade, some people complained that their orders weren’t right.
When Twitter’s IPO was taking longer than expected to price, NYSE people kept saying something to the effect that this is the benefit of having people involved. They can keep track of how the stock is being priced and make sure no one gets screwed.
One person said that IPOs are more “art than science” and they’re based on sentiment, so you couldn’t use computers or algorithms to really work on them in the early stage of trading.
This was the general message all morning: We have people keeping an eye on things, the NASDAQ doesn’t.
And if that wasn’t enough, after the Twitter IPO, Reuters made this infographic showing that the NYSE is now beating the NASDAQ for tech IPOs: