Why are Cornerstone (Anchor) Investors favored on Nasdaq Stockholm and the envy of Europe, but seemingly still disfavored in the US Micro-Cap ($300mm or less) world?
90% of Nasdaq Stockholm listing are under $1B and some are around Micro-Cap levels—yet why the disparity?
The analysis shows that “Every single successful IPO (on Nasdaq Stockholm) has involved some level of cornerstone investor” says the Financial Times, yet in the US #Nasdaq appears to still disfavor or even not allow Anchor investors, or multiple investors who hold any significant percentage of a company’s securities at the IPO, even if the Issuer meets all the public float requirements.
Is it the quality of the Anchor Investor that matter? Is it because the US markets have more eyeballs and thus more activity and volatility to start? Is it because all deal sizes below $25mm need to be more heavily scrutinized under the “Concentration and Distribution” guidance? How were Anchor investors allowed for decades on Nasdaq but now fallen out of favor? How do we reconcile the two markets and the different approaches?
There are countless stories of transactions on Nasdaq from issuers, investment bankers, consultants, attorneys, and others of Issuers meeting all the “Listing Qualification” criteria for a successful #IPO and either being denied approval or sent back to the drawing board to reduce or eliminate the presence of an Anchor or other Investor(s), in what is now commonly referred to in the industry as “Deal Qualification”.
Our Forbes Article from July 2023 “Anchor Investors Fall Out of Favor as Micro-Cap IPO Landscape Evolves” appears to be more relevant now than ever given the disparity across the Atlantic.
Anchor Investor Article:
https://shorturl.at/djWZ8
Curious to hear your thoughts, experiences and how we as an industry can help Nasdaq get comfortable again with allowing Anchor Investors in the Micro-Cap world. Nasdaq is the undisputed market leader in listing Micro-Cap companies and the industry should rally around them to create viable solutions so Micro-Cap transactions can once again enjoy the promise of the past with these larger and longer-term investors.
Whether our clients engage in an Uplist, Cross-list, Direct List, #SPAC, de-SPAC, Merger, #ReverseMerger or #IPO through a private placement, firm commitment underwriting, Reg A or otherwise, Lucosky Brookman is at the forefront of sophisticated OTC and Senior Exchange Listed Transactions.
#ipo #lucoskybrookman #nyse #nasdaq #cboe Lucosky Brookman LLP Joseph Lucosky
Chief Operating Officer || AIMS Healthcare || Healthcare || Homecare Professional
6moMyles, Thanks for sharing!