Good morning.
Welcome to the fourth quarter of 2023.
The IPO market has been basically dormant since 2021. But that changed in September due to the blockbuster Nasdaq debut of Arm Holdings, the semiconductor designer owned by SoftBank Group, and also a boost from the grocery delivery company Instacart.
“I think that what we've been describing is a deep frost and now we're seeing some light green shoots,” Adena Friedman, chair and CEO at Nasdaq, said in an interview with journalist Emily Chang on Sept. 28 during the annual Workday Rising event in San Francisco (Workday is a CFO Daily sponsor). The Arm and Instacart IPOs “did quite well on their first day” and there was “a very strong investor demand for their IPOs,” Friedman said.
Arm began trading on Nasdaq on Sept. 14. It delivered the year’s biggest IPO when it raised about $4.9 billion, and the performance bodes well for the rest of the IPO market, Fortune reported. Meanwhile, Instacart's long-awaited debuted was on Sept. 18 with shares priced at $30. It shot up 40% to open at $42, but ended up closing at $33.70.
“We're having very concrete conversations with clients,” Friedman said. “We have a very good pipeline of companies who want to come out.” But, she added, “a lot of the conversations are still more about the first half of next year, than the second half of this year.”
Friedman also gave her assessment of investing activity. Investors realize they’ve been sitting on the sidelines for quite some time, she said. But there are good reasons for them doing so. For example, there was uncertainty about the interest rate environment, and a lot of conflicting data that made it hard to execute a buying decision with conviction, Friedman said.
“But now that the interest rate environment is a little bit more known and the economic environment stronger than they originally would have expected, they are starting to realize that they can't quite sit on the sidelines forever,” she said. “It's time for them to deploy their capital.”
Friedman, who started as an intern at Nasdaq 30 years ago, has held several leadership roles, including CFO, president and COO. “We are an underpinning of the entire capital market; and we, Nasdaq, really created it as a technology-first platform in 1971,” she said. A major part of the company’s focus has been on maintaining modern markets, bringing Nasdaq’s markets to the cloud, and using advanced technology to serve external clients, Friedman said.
Along with being a chief executive, Friedman is also a second-degree black belt in Taekwondo.
She’s learned two key lessons that can be applied to business: “The importance of putting yourself in an uncomfortable situation, and forcing yourself to get comfortable with being uncomfortable,” Friedman said. “The second one is you have to play offensive and defense all the time. As a company, you always have to make sure you have great resilience, your foundation is really strong, and you're number one in what you do.”
Sheryl Estrada
sheryl.estrada@fortune.com
