NYSE Targets Emerging-Growth Companies

By: scutler

File Under: Listed Companies

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From Scott Cutler: With all the buzz about Bernanke's comments on 60 Minutes last night, you may not have seen the Reuters article outlining some of the NYSE's efforts with emerging growth companies. While the NYSE is proud that it lists some of the largest and best-known companies in the world, few are aware that some of the fastest-growing brands and companies list here too (think Netezza, RackSpace, NetSuite, K12 and 3Par, among others). In fact, about a third of NYSE-listed companies have a market cap of less than $1 billion.

The NYSE is committed to emerging growth companies and has recently added a new listing standard to better target this vibrant group. Historically, companies qualified for the NYSE under an income, valuation with cash flow or pure valuation standard, which enabled a small number of emerging growth companies to list on the NYSE. The new standard is based on an assets and equity test and doesn't have an income or revenue component. In particular, it requires IPOs to have at least $150mm market capitalization, $75mm assets and $50mm stockholders' equity, among other requirements, and the assets and equity are pro forma for the IPO proceeds.

This new standard enables a large group of high-quality technology, cleantech and biotech companies to list directly on the NYSE for the first time. In fact, approximately 70 percent of IPO candidates could now be eligible for a NYSE listing, as opposed to 30 percent under our previous standards. In addition to positive feedback from clients, we have received tremendously positive feedback from the venture capital community. This new standard not only provides a choice of market for their portfolio companies, but also access to the NYSE's exceptional visibility and branding opportunities, services and network for its emerging growth companies.

So while the IPO market may be slow for now, we are busier than ever spreading the word about this new opportunity. If you see us on the road, come up and say hello. Your company may indeed be eligible to list on the NYSE!