NYSE Vice Chair: There is a ‘strong pipeline of companies’ to come in the year ahead
John Tuttle, NYSE Vice Chair, joins Yahoo Finance’s Alexis Christoforous to discuss the outlook on the IPO market in the year ahead and the future of the NY Stock Exchange.
Video Transcript
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ALEXIS CHRISTOFOROUS: Welcome back to "Yahoo Finance Live." Despite the pandemic, 2020 turned out to be a record year for new stock offerings. At the New York Stock Exchange alone, companies raised well over $80 billion, and 2021 is off to a banner start. My next guest oversees IPOs at the New York Stock Exchange.
We are talking about John Tuttle, Vice Chair and Chief Commercial Officer, who is joining us from the Exchange, I'm happy to say. John, good to see you. And speaking of 2021 and getting off to a banner start, I know you had one of the biggest IPOs in years roll out today on your exchange. It's the South Korean company Kupang that, I guess, is the equivalent of Amazon in the US or Alibaba in China. Tell us about that offering and how you wooed them to your exchange.
JOHN TUTTLE: Well, first of all, it's great to be with you and great to be back here at 11 Wall Street. First of all, it's not only been a busy day. It's been a busy week, a busy year as well. But yesterday, we had Roblox with its direct listing come to market. Their opening trade was one of the four-- I believe it was the fourth largest opening trade in the history of US markets. And that led into today, with Kupang listing on the New York Stock Exchange.
As you mentioned, Alexis, South Korean e-commerce company involved in logistics, in payments, everything in between. Raised over $4.5 billion, which means not only is it the largest non-US IPO since Alibaba, it's one of the top four IPOs by size in the last decade in the United States. So exciting morning.
It took a little while to open the stock, but one of the things we're very focused on, as you know, is taking as long as necessary to get that first price and open it for trading. And we're pleased to welcome Kupang here today.
ALEXIS CHRISTOFOROUS: You mentioned taking a little longer than usual. We saw that yesterday with Roblox. I think it started trading well into the early afternoon. I think it was something like 1:30 in the afternoon. Roblox is up again for a second straight day, but was there anything in particular about yesterday and Roblox that caused that to get off a little bit later than usual?
JOHN TUTTLE: Well, it was a direct listing. And what we realized with the direct listing is there's a lot of volume. There's a lot of shares, a lot of free float. And one of the things that we're very much focused on and uniquely positioned to do is execute large and complex transactions.
And so we watch the price discovery process play out in a very transparent manner here at the exchange. We wanted to open at the right price. And just given the size of these transactions, whether it be Roblox or Kupang today, you know, those can take a while. So both of them went into the afternoon or close to afternoon, but they're both open and trading and trading up.
ALEXIS CHRISTOFOROUS: So the Korean company-- obviously, an international company-- coming to market. Can you tell us what the appetite has been like for companies outside the US to go public here? We're still in the throes of this pandemic. What are you hearing?
JOHN TUTTLE: There are companies from around the world that are looking to raise capital in the United States and on the New York Stock Exchange. And so today, with South Korea, we have a strong pipeline of companies from South America, from Europe, even from China, despite all of-- some of the rhetoric that had been going on over the past six months. So the US capital markets continue to attract high-quality companies from around the world, and we're also continuing to see it from across sectors, as well.
So domestically, it's everything from health care to technology to, of course, SPACs and everything in between. So right now, the markets and their investors have been rewarding companies that have been listing. And we have a strong pipeline of companies set to come between now and at least through the second half of the year.
ALEXIS CHRISTOFOROUS: If you had to pick a couple of words that were sort of the words of the pandemic, I think unprecedented, pivot, and SPAC would be among them. Talk to us about how popular the SPAC has become, especially at the New York Stock Exchange. And as more companies come to you and say they want to go public, how are they choosing to do it? Direct listing, SPAC, or the more traditional IPO way?
JOHN TUTTLE: It's a great question. The past year has been full of surprises, including the words you just described were appropriate. But what I would say is a year ago, if you were talking to us and talking about the IPO market, never would we have imagined that 2020 would have been a record year not only for the New York Stock Exchange, but more broadly across the US capital markets.
Companies also are thinking about the different pathways they have to come to the public markets. For a long time, it had just been the IPO. And we have been working for years to create the direct listing, the direct listing plus capital raised to put rules in place to allow SPACs to list in the marketplace. And now companies have options. And that's what's encouraging.
And so in those conversations we have with CEOs, CFOs, public-- or corporate boards as they think about coming to the market, we can describe to them the different pathways that may be best suited to meet their objectives as a company and their investors' objectives. So yes, the SPAC has seen a increase in 2020 and even in 2021, but it's one of several different pathways that have really emerged over the past 12 months-- in particular, during the pandemic-- for companies to come to market.
ALEXIS CHRISTOFOROUS: I know that this pandemic forced the physical closure of your building there at 11 Wall Street. I think it was the longest stretch we had ever seen last year, although you were still able to keep trading going, a testament to your technology and to the Exchange. But tell us what things are like there on the floor one year later, what capacity is like, and when do you hope to ramp things up?
JOHN TUTTLE: Yeah. It was an unprecedented year, for sure. And certainly, we were prepared for that temporary closure of the trading floor due to COVID. But we're back. And every day, we're welcoming more and more of our traders, the market makers, and other participants back into that building. Of course, we have safety protocols, and we're thoughtful about how we do that. But as each day goes by, you feel more and more energy here at 11 Wall Street on the trading floor. And we felt it this morning with Kupang and what is the largest IPO of the year so far.
ALEXIS CHRISTOFOROUS: I'm going to play devil's advocate for just a moment. You were able to continue trading really without missing a beat, even though your floor was shut down for an extended period during the pandemic. There's been talk for years that the Stock Exchange, the physical building, would go away.
Are you having internal talks about making the footprint smaller? I know it has shrunk over the years. I mean, when I started reporting from there in the mid '90s, it was-- it looked like a very different place. But what about the footprint now and going forward? What are you all thinking about?
JOHN TUTTLE: Well, it's a great question. And one of the things we realized during the pandemic is that we were able to run an experiment that under normal circumstances we never would have, and that was the question of how much of our outperformance in trading company stocks is due to our model or due to the trading floor. And what we realize is that even with that trading floor portion offline, we continued to outperform because of our model.
Now once we were able to allow more folks back into the building and safely, we were pleased to bring that part of our offering back online and support our listed companies and the companies looking to come to market.
ALEXIS CHRISTOFOROUS: All right. John Tuttle, Vice Chair of the New York Stock Exchange, good to see you. And we'll be watching all those IPOs this year.
JOHN TUTTLE: Great to be with you. Thank you.
