A quiet first half of 2023 is expected for initial public offerings by Nasdaq CEO Adena Friedman as investors remain cautious, but she hopes activity will pick up in the second half of the year.
There are currently about 200 companies that have IPOs “in the pipeline” on Nasdaq, which is down from the recent range of between 250 and 300, Friedman said during an interview at a Reuters conference.
Last year was a landmark year for IPOs on the Nasdaq with more than 750 new listings, fueled largely by the “boom” in special purpose acquisition companies (SPACs), but that activity has slowed considerably as high inflation and rising interest rates have shaken market sentiment and SPACs are subject to tight regulatory controls.
Nasdaq had 143 IPOs in the first nine months of 2022, compared to 557 in the first three quarters of 2021.
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Nasdaq and crypto
The Wall Street tech index has also been active in the cryptocurrency space for several years, providing trading and surveillance technology to digital asset exchanges, and Friedman noted that the space needs to be more regulated in order to attract institutional investors.
“Now is the time to catch up and make sure that as we move forward, we have safety and soundness, but we also allow for innovation and a flexible ecosystem,” she said, adding that Nasdaq has been an innovator for 50 years in a highly regulated industry.
Cryptocurrencies have come under pressure this year after a series of momentous bankruptcies at crypto lenders and exchanges, the biggest being FTX, which collapsed after traders withdrew $6 billion from the platform in three days while Binance abandoned its bailout deal.
FTX’s collapse left about 1 million creditors with billions of dollars in losses.
Nasdaq has also given a big boost to anti-financial crime software with its $2.75 billion acquisition of Verafin, announced in December 2020.
Friedman believes Nasdaq’s fast-growing financial crime fighting unit could become a $1 billion-a-year business, three times its current revenue.
