Michael Harris, President of the NYSE, recently appeared on Bloomberg TV to discuss new listings. The rivalry between the NYSE and Nasdaq is often framed around who wins the biggest IPOs and which exchange provides a better trading environment. While this debate is longstanding, I’ve generally dismissed it. At the end of the day, both exchanges bring high-quality companies to market, and my focus has always been on the offering itself, not necessarily where it lists.
However, Harris made a comment that got me thinking:
“The way that stocks trade on the New York Stock Exchange is different than on any other exchange venue globally. We think that offers lower volatility, better liquidity, and the best environment for both issuers and investors.”
That claim made me wonder: To what extent is this true? And more importantly, does it have any impact on IPO Prophet signals?
I decided to take a closer look at IPOs that have generated Bull Signals—the names we have taken long trades in based on our process. By running a quantitative comparison of trading signals across the two exchanges, I aimed to identify meaningful differences in IPO behavior, from initial premiums to trade ROI and volatility dynamics.
The results are instructive. While an IPO listing on either the NYSE or Nasdaq that generates a Bull Signal is a valid trade in our process, Nasdaq IPOs exhibit greater volatility—both to the upside and downside.
To analyze the impact of listing venue on IPO performance, I compiled a dataset of IPOs that have triggered Bull Signals from 2012 to the present. Below is a side-by-side comparison of key metrics:
| Metric | Nasdaq | NYSE |
|---|---|---|
| Number of IPOs | 286 | 258 |
| Aggregate Offering Volume | $75.3B | $87.1B |
| Average Offer Size | $263.3M | $337.6M |
| Avg. IPO Premium | 33.64% | 25.04% |
| Median IPO Premium | 27.89% | 18.86% |
| Trade ROI (Avg.) | 3.18% | 1.82% |
| Trade ROI (Q3) | 7.54% | 3.66% |
| Bear Signal Count | 165 | 121 |
Beyond IPO-level statistics, I wanted to examine trade-level performance.
Our Approach to Trading IPO Volatility
At IPO Prophet, our process seeks to capture upside volatility in new listings by:
(A detailed primer on our signaling process can be found here: About Our Signals.)
The chart below shows the distribution of trade-level performance for Nasdaq and NYSE IPOs. The diagonal lines represent a normal distribution, helping to highlight skewness.
Key Takeaways from the Distribution:
So, does the exchange matter for IPO trading? In absolute terms, no—a Bull Signal on either exchange remains a valid trade under our process. However, this analysis enhances our understanding of how IPOs behave differently depending on where they list. Nasdaq IPOs tend to be more volatile, making them stronger short-term momentum trades but also riskier. NYSE IPOs, on the other hand, are larger, more stable, and less volatile, but still produce significant outliers that generate meaningful upside. While Nasdaq contributes more to our strategy overall, nothing in this analysis suggests we should treat IPOs differently based on their listing venue. Instead, these findings help refine our expectations, particularly regarding position sizing and risk management.
Ultimately, we trade IPOs based on signals, not listing venues, but understanding the nuances between the two exchanges allows us to anticipate the likely behavior of a new listing. By recognizing the patterns in volatility and performance, we can better calibrate our trades while maintaining our core process. Whether an IPO lists on the NYSE or Nasdaq, our focus remains the same: identifying and executing trades based on objective market signals.
The following is a little more detail on this analysis and we would be happy to provide more to anyone interested!
| NYSE Company | Ticker | Date | IPO Premium | Trade ROI |
|---|---|---|---|---|
| C3.ai, Inc. | AI | 12/2020 | 138.10% | -5.38% |
| CASTLIGHT HEALTH, INC. | CSLT | 03/2014 | 134.38% | 3.47% |
| Shake Shack Inc. | SHAK | 01/2015 | 123.81% | -1.33% |
| Oak Street Health, Inc. | OSH | 08/2020 | 102.38% | -9.05% |
| Container Store Group, Inc. | TCS | 11/2013 | 94.44% | 3.51% |
| NASDAQ Company | Ticker | Date | IPO Premium | Trade ROI |
|---|---|---|---|---|
| BigCommerce Holdings, Inc. | BIGC | 08/2020 | 183.33% | 6.46% |
| CureVac N.V. | CVAC | 08/2020 | 175.00% | 25.37% |
| Seer, Inc. | SEER | 12/2020 | 152.63% | -3.53% |
| Poshmark, Inc. | POSH | 01/2021 | 132.14% | -0.26% |
| HYDROFARM HOLDINGS GROUP, INC. | HYFM | 12/2020 | 130.00% | 1.59% |
| NYSE Company | Ticker | Date | IPO Premium | Trade ROI |
|---|---|---|---|---|
| Cloopen Group Holding Ltd | RAAS | 02/2021 | 68.75% | 84.33% |
| Fiverr International Ltd. | FVRR | 06/2019 | 23.81% | 53.12% |
| Revolve Group, Inc. | RVLV | 06/2019 | 39.78% | 38.59% |
| Montrose Environmental Group, Inc. | MEG | 07/2020 | 10.00% | 37.88% |
| MediaAlpha, Inc. | MAX | 10/2020 | 21.05% | 36.30% |
| NASDAQ Company | Ticker | Date | IPO Premium | Trade ROI |
|---|---|---|---|---|
| Seres Therapeutics, Inc. | MCRB | 06/2015 | 58.33% | 72.39% |
| Sigilon Therapeutics, Inc. | SGTX | 12/2020 | 22.22% | 55.35% |
| ROKU, INC | ROKU | 09/2017 | 12.71% | 45.50% |
| BEYOND MEAT, INC. | BYND | 05/2019 | 84.00% | 42.41% |
| Nutanix, Inc. | NTNX | 09/2016 | 65.62% | 38.45 |
IPO Prophet’s value lies in our proprietary signaling process. We analyze Initial Public Offerings using a suite of algorithms refined over the past 20 years. The table above highlights all IPOs in 2024 where IPO Prophet has generated a Bull Signal, demonstrating returns based on our signals and subsequent performance since the opening trade. While our indicators can be applied to longer-term positions, the data above reflects only the first day’s performance, as our signals are designed specifically for issuance day, with positions marked to market at the close of the IPO’s first trading day. To learn more about our process, here.