Numpty question - stock exchanges

[ChevronB19]

It’s been in the news that ARM have launched on the NYSE, and how it’s not good for London SE.

Why is this? What’s the advantages/disadvantages of listing on a certain stock exchange?

I am a complete numpty about this, but have always wondered - surely they are global markets and it’s irrelevant who you buy shares from?

[Countdown]

I think tech companies get a much higher valuation on NASDAQ than they would on the LSE.

Basically Softban will get more money from floating it on NASDAQ than they would if they listed in the UK

[Jon39]

For a long-time ARM was listed in London. Then a takeover occurred.

It is not just tech businesses that have low London ratings.
There are a number of very solid profitable FTSE 100 businesses, which have a P/E below 10, some with 6, 7, 8% dividend yields.
Whether that is a temporary phenomenon, who knows, but of course it does not encourage new listings.

[Newc]

Countdown said:

I think tech companies get a much higher valuation on NASDAQ than they would on the LSE.

Exactly this. The sentiment is that a) there's a bigger pool of investors in the US markets who want to hold tech stocks, and b) that demand will drive a higher valuation.

It's a slightly self-fulfilling situation: eg Nasdaq is now more attractive to tech investors because ARM has listed there so as to attract tech investors.

[uknick]

It won't be good for the London stock Exchange as they won't get any dealing commission.

[Condi]

Some of it is prestige as much as anything else. You're right, it makes no difference, but it looks good for London to have valuable companies listed there, which then encourages other companies to list there.

It is also slightly harder for UK investors to buy NASDAQ listed companies, but nothing a bit of paperwork doesn't solve.

[ChevronB19]

Condi said:

Some of it is prestige as much as anything else. You're right, it makes no difference, but it looks good for London to have valuable companies listed there, which then encourages other companies to list there.

It is also slightly harder for UK investors to buy NASDAQ listed companies, but nothing a bit of paperwork doesn't solve.

Thank you! Only reply I actually understood (not intended as an insult to others, I told you I’m a numpty).

[paddy1970]

ARM's decision to list on the New York Stock Exchange (NYSE) rather than the London Stock Exchange (LSE) is mainly due to the following:

Markets like the NYSE typically have higher trading volumes, which can result in better liquidity for a company's stock.

A listing on the NYSE can attract a more diverse range of institutional investors, who might offer better valuation.

NYSE-listed companies often receive more media attention, both in the United States and internationally, potentially boosting the company's profile.

Each exchange has its regulatory requirements, and some companies may find the NYSE's regulatory environment more conducive to their business.

In terms of buying shares, you are correct that they are essentially global markets, especially for individual investors who can easily trade international stocks. However, from the company's standpoint, the choice of listing venue can have significant operational, financial, and strategic implications.

[Condi]

paddy1970 said:

ARM's decision to list on the New York Stock Exchange (NYSE) rather than the London Stock Exchange (LSE) is mainly due to the following:

ARM listed on Nasdaq, not NYSE.