How Should Companies Communicate With Wall Street?
Wall Street is very sensitive to communication. Every quarter, executives from top companies communicate their results to the street. Based on the content of this communication, the market reacts. Sometimes the market turns volatile. However, at other times the market remains stable. Apart from the content being communicated, the manner in which it is also […]
How Does The Failure of Silicon Valley Bank Affect Stakeholders
The fall of the Silicon Valley Bank happened very suddenly. The bank had gone from a healthy functioning bank to near bankruptcy within 48 hours! As a result, the credibility of the entire American banking system has been brought into question. This is because commercial banks are not like regular organizations. In most cases, they […]
Behavioral Finance – An Introduction
As investors, we are often perplexed by the behavior of the markets. For instance, we may find a stock to be overvalued. Hence, ideally, the stock should drop in value and become fairly priced. However, in reality, it may keep on increasing in value, and the quantum of overvaluation may increase vastly. Similarly, we may […]
The South Sea Bubble
The South Sea Bubble is one of the largest asset bubbles that the world has ever seen. In fact, this bubble bankrupted the newly prosperous British economy during the 17th Century. At one point in time, all the money is Britain was not enough to pay down the debts that accrued as a result of […]
Impact of Geography on Banking and its Functions
Why Geography matters for Banking With the world economy being integrated and interconnected due to the process of globalization, the geography of banking has assumed a different dimension altogether. Gone are the days when customers had to visit the branch physically to deposit and withdraw money. Instead nowadays, customers can transact their business in a […]
Uber and Pinterest are amongst the hottest tech start-ups in the world right now. This is why the fact that both of these companies have chosen the New York Stock Exchange (NYSE) to list their shares on is being seen as great news for the exchange. The NYSE has beaten the NASDAQ as well as many foreign stock exchanges in order to achieve this feat. This is remarkable from the point of view of NYSE. However, it also raises questions about how companies choose the stock exchange where they plan first to list their shares.
In this article, we will have a closer look at some of the factors which are commonly considered by companies before they zero down on a stock exchange.
About a century ago, the entire world was not well developed. This is the reason that there was a lot of difference in the operational performance of different stock exchanges. The operational charge at some stock exchanges was much higher when compared to the others. Also, there was a substantial difference in the liquidity offered at different exchanges.
However, in the past couple of decades, these differences have all but vanished. Stock exchanges across the world now work electronically. This allows buyers to trade seamlessly without experiencing much of a difference.
Hence, the factors which affect a company’s choice of stock exchanges has undergone a huge change over the past few years:
The factors which now play an important role in the choice of stock exchange have been listed below
However, the listing of shares on one exchange does not mean that it cannot be traded on the other exchanges. It just means that the company first chose to sell their shares on a certain exchange. Over a period of time, the shares of big companies are usually sold at all exchanges at almost the same price. Every minor price differences are exploited by arbitrageurs looking to make a quick buck.
Your email address will not be published. Required fields are marked *
