As more European companies eye Wall Street for their
debut listings, exchanges on the continent are mounting a counteroffensive.
With IPO volumes already depressed, operators like
Deutsche Boerse and Euronext are pressing to change the narrative that New York
guarantees better value for newly public firms, Reuters reported.
Citing a document circulated among German firms and
IPO advisers, Deutsche Boerse cautions against the hype surrounding U.S.
listings. It warns of weak post-IPO performance, steeper legal costs, and
greater litigation risks tied to U.S. markets.
Hype Surrounding US Listing
The exchange also highlights new internal research
showing that two-thirds of firms listing in Europe, including Germany, gained
on their first trading day, compared to only half of European companies listing
in the U.S.
The study stops short of comparing initial valuations.
But Deutsche Boerse argues that several firms listed in Europe now trade at a
premium to similar businesses that chose a U.S. launch.
Euronext, which operates across seven cities including
Amsterdam and Paris, plans to release its own rebuttal. Like the London Stock
Exchange’s “mythbusting” paper issued in March, the move seeks to challenge the
perception that U.S. exchanges guarantee stronger valuations.
IPO Landscape
Europe has seen a sharp decline in public offerings in
recent years, with many firms attracted to the perceived depth of U.S. capital
markets. According to LSEG data, the $49.5 trillion market capitalization of the S&P 500 dwarfs Europe’s Stoxx 600 by nearly four times. Despite this gap, European exchanges are making the
case that homegrown listings can yield better long-term results.
Deutsche Börse claims that since 2004, the average
share price of German firms that went public in the U.S. has fallen by 13%.
Companies like trivago and Mytheresa have struggled post-listing. In contrast,
issuers who were listed in Frankfurt saw average gains of 24%.
With capital formation increasingly shifting abroad,
European regulators are also taking note. Reforms to listing rules are under
consideration to make local markets more attractive to both companies and
investors.
Exchanges, meanwhile, continue to emphasize their role
as key infrastructure, crucial for regional investment and economic resilience.
While Wall Street’s allure remains strong, Europe’s stock exchanges are no
longer willing to accept the narrative without a challenge.
As more European companies eye Wall Street for their
debut listings, exchanges on the continent are mounting a counteroffensive.
With IPO volumes already depressed, operators like
Deutsche Boerse and Euronext are pressing to change the narrative that New York
guarantees better value for newly public firms, Reuters reported.
Citing a document circulated among German firms and
IPO advisers, Deutsche Boerse cautions against the hype surrounding U.S.
listings. It warns of weak post-IPO performance, steeper legal costs, and
greater litigation risks tied to U.S. markets.
Hype Surrounding US Listing
The exchange also highlights new internal research
showing that two-thirds of firms listing in Europe, including Germany, gained
on their first trading day, compared to only half of European companies listing
in the U.S.
The study stops short of comparing initial valuations.
But Deutsche Boerse argues that several firms listed in Europe now trade at a
premium to similar businesses that chose a U.S. launch.
Euronext, which operates across seven cities including
Amsterdam and Paris, plans to release its own rebuttal. Like the London Stock
Exchange’s “mythbusting” paper issued in March, the move seeks to challenge the
perception that U.S. exchanges guarantee stronger valuations.
IPO Landscape
Europe has seen a sharp decline in public offerings in
recent years, with many firms attracted to the perceived depth of U.S. capital
markets. According to LSEG data, the $49.5 trillion market capitalization of the S&P 500 dwarfs Europe’s Stoxx 600 by nearly four times. Despite this gap, European exchanges are making the
case that homegrown listings can yield better long-term results.
Deutsche Börse claims that since 2004, the average
share price of German firms that went public in the U.S. has fallen by 13%.
Companies like trivago and Mytheresa have struggled post-listing. In contrast,
issuers who were listed in Frankfurt saw average gains of 24%.
With capital formation increasingly shifting abroad,
European regulators are also taking note. Reforms to listing rules are under
consideration to make local markets more attractive to both companies and
investors.
Exchanges, meanwhile, continue to emphasize their role
as key infrastructure, crucial for regional investment and economic resilience.
While Wall Street’s allure remains strong, Europe’s stock exchanges are no
longer willing to accept the narrative without a challenge.
