WEBVTT - Nasdaq CEO Expects Strong IPO Environment This Year

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Now, investors across the globe are waiting for an IPO comeback.

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<v Speaker 2>Nazak has one of the most intimate views of what

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<v Speaker 2>that market could look like and joining us now on

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<v Speaker 2>the heels of Nasdaq's four year results that beat analyst estimates.

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<v Speaker 2>Adina Friedman, NASDAK Chair and CEO. Everyone's waiting, Everyone's waiting.

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<v Speaker 2>We haven't seen a full rush back to market yet

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<v Speaker 2>for initial public offerings.

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<v Speaker 1>What are you seeing under the surface? How soon can

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<v Speaker 1>we get there? Well, I think.

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<v Speaker 3>As we exit, As we exited twenty twenty four, we

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<v Speaker 3>saw that investors are feeling more confident in having more

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<v Speaker 3>I would say, some level of predictability on in terms

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<v Speaker 3>of interest rates and inflation.

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<v Speaker 1>The growth, it's been resilient.

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<v Speaker 3>We've started to see some normalization in illness of the

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<v Speaker 3>economy that allow investors to feel more confident in putting

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<v Speaker 3>capital to work.

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<v Speaker 1>So coming into twenty.

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<v Speaker 3>Twenty five, we have been expecting the fact that that

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<v Speaker 3>the IPO environment will likely heat up as we go

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<v Speaker 3>into Q two and into later in the year, because

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<v Speaker 3>you have to get through a big change in the

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<v Speaker 3>administration and other changes that are happening at the beginning

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<v Speaker 3>of the year. But we are talking with a great

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<v Speaker 3>number of companies that are excited to come and tap

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<v Speaker 3>the public markets. They're putting at least tentative dates on

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<v Speaker 3>the calendar and getting very prepared for.

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<v Speaker 1>Is it a flood or is it a trickle?

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<v Speaker 3>You know, it's hard to know, honestly, it really depends

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<v Speaker 3>on a lot of factors. I can only say that

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<v Speaker 3>we have a high, healthy pipeline of really interesting companies

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<v Speaker 3>that are ready to come out this year. We've seen

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<v Speaker 3>also both the VC investors and private equity investors really

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<v Speaker 3>gearing up to bring companies out, and so it's just

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<v Speaker 3>a matter of are they going to see the reception

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<v Speaker 3>that they're looking for. But investors are also ready to

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<v Speaker 3>put risk capital to work, and you know, I think

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<v Speaker 3>that that you know, as you know, our company is

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<v Speaker 3>broader than that.

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<v Speaker 1>Today, but as we looked.

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<v Speaker 3>At the business and in the markets, you know, we

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<v Speaker 3>continue to see good trading volumes and an opportunity to

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<v Speaker 3>have a better listing environment, great index performance, and then

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<v Speaker 3>of course we have our technology division as well.

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<v Speaker 2>Speaking of index performance, forty years of the NASDAQ one hundred,

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<v Speaker 2>I know you were celebrating that. If we reflect on

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<v Speaker 2>what we're seeing right now, of course there's been a

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<v Speaker 2>lot of change to that Nasdaq one hundred.

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<v Speaker 1>Where do you see the Nasdaq one hundred.

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<v Speaker 2>Going in the next couple of years given this rapid

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<v Speaker 2>change in the technology environment that we're seeing, Well, I

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<v Speaker 2>think we.

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<v Speaker 3>Should take a minute to step back and look at

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<v Speaker 3>the NASOG one hundred over that forty year period. The

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<v Speaker 3>first thing to note is that over a forty year period,

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<v Speaker 3>the NAZAQ one hundred is delivered a fourteen plus percent cager.

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<v Speaker 1>Growth compounded annual growth over that forty years. So what

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<v Speaker 1>does that really represent?

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<v Speaker 3>That really represents the fact that the NASOGA one hundred

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<v Speaker 3>reflects the future of the economy, that it is kind

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<v Speaker 3>of the index that is driving that reflects where the

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<v Speaker 3>economy is going, how technology is going to have an

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<v Speaker 3>impact on the economy and has delivered incredible, incredible growth

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<v Speaker 3>in returns for shareholders in the index. Going forward, we're

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<v Speaker 3>going to continue to see technology as the driver of

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<v Speaker 3>the economy. If anything, that's going to accelerate even faster.

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<v Speaker 3>There are going to be new companies coming in the

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<v Speaker 3>large tech companies are continuing to make massive investments in

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<v Speaker 3>the future infrastructure to support the future of the economy

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<v Speaker 3>and AI technology is we're just at the dawn of that,

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<v Speaker 3>and I also believe that you'll see more and more

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<v Speaker 3>companies benefiting from that in terms of efficiency and productivity

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<v Speaker 3>across the entire economy, and that'll benefit all stocks, but

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<v Speaker 3>also the fact that the technology ecosystem will continue.

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<v Speaker 1>To be the driver of the future.

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<v Speaker 2>You know, as we said here today and talk about technology,

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<v Speaker 2>there was a lot of questions really burning in the

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<v Speaker 2>market this week with the deep seek moment, this question

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<v Speaker 2>about cat back spending, what it means for many companies.

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<v Speaker 2>How do you see that dilemma from your perch. A

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<v Speaker 2>lot of people were throwing around the term Spetnik moment,

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<v Speaker 2>but that was also also seen as a hyperbole elsewhere.

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<v Speaker 1>How do you feel about it?

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<v Speaker 3>Yeah, First of all, we are at the beginning of

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<v Speaker 3>the dawn of a new technology and I would even

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<v Speaker 3>say potentially a technology revolution. And we have to reflect

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<v Speaker 3>on the fact that there's going to be a lot

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<v Speaker 3>of innovation that comes down in the space. Every new

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<v Speaker 3>innovation is going to have the opportunity to benefit every

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<v Speaker 3>industry and that's the great thing about this technology is.

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<v Speaker 3>It's not industry specific, it's not even operations specific. It

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<v Speaker 3>has the ability to infuse itself across companies to create

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<v Speaker 3>drive efficiency and productivity. So you have these new innovations

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<v Speaker 3>that come out. I think competition is good. I would

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<v Speaker 3>never underestimate the power of American innovation. I think that

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<v Speaker 3>it means that we can have more options, more choices

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<v Speaker 3>as we look at using this technology ourselves. NASAC is

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<v Speaker 3>very deep in bringing this GENAI technology into our product suite.

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<v Speaker 3>We have our financial technology suite. By the way, overall,

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<v Speaker 3>NAZAC grew nine percent in twenty twenty four and our

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<v Speaker 3>Technology division grew ten.

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<v Speaker 1>Percent in twenty twenty four.

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<v Speaker 3>We bring that technology in to drive and automate workflows

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<v Speaker 3>for our clients, make them more efficient, make it so

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<v Speaker 3>that we can root out criminal behavior more efficiently and effectively,

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<v Speaker 3>make sure we can do regulatory reporting more efficiently effectively.

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<v Speaker 3>There's so many ways that we're using that technology. In

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<v Speaker 3>our fintech division, and then in our cap division, which

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<v Speaker 3>are have access platforms, we're developing new index products leveraging AI.

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<v Speaker 3>We're also bringing those that GENAI capabilities into workflows for

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<v Speaker 3>corporates and investors to make their lives more efficient.

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<v Speaker 1>And we're just started like this is like.

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<v Speaker 3>Year one of what this technology is really capable of.

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<v Speaker 2>Well, it's interesting because as somebody who leverages this technology

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<v Speaker 2>throughout many businesses, as you were talking about, wouldn't.

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<v Speaker 1>You want it to be cheaper? Well, in general, what.

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<v Speaker 3>We should expect is that there's going to be a

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<v Speaker 3>massive amount of innovation. Innovation generally makes things more efficient.

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<v Speaker 3>Efficiency drives price down. There's already been a very large

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<v Speaker 3>efficiency that's come into these models. Anyway, they're much cheaper

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<v Speaker 3>today than they were a year ago, So I just

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<v Speaker 3>think that that will continue to be the case.

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<v Speaker 1>But also the use of.

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<v Speaker 3>It is going to ex broaden and expand dramatically. The

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<v Speaker 3>more efficient and the more affordable, the use is going

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<v Speaker 3>to go up a lot. So every model creator, they're

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<v Speaker 3>going to have an opportunity to find a growing market here.

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<v Speaker 2>You know, I'm glad you brought up American innovation because

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<v Speaker 2>another aspect of this is the concern that maybe investors

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<v Speaker 2>aren't realizing the type of competition that Chinese AI models

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<v Speaker 2>are presenting. How do you feel about that dynamic and

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<v Speaker 2>view it from your seat?

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<v Speaker 3>I again, I'll never underestimate the power American innovation. And

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<v Speaker 3>I think that you know, as we've always talked about

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<v Speaker 3>the economy's global, technology is global, and we have to

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<v Speaker 3>operate and compete in a global economy. So it's very

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<v Speaker 3>important that we all just support this innovation in a

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<v Speaker 3>way that is going to drive the right results for companies,

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<v Speaker 3>the right results for society. I actually I'm very optimistic

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<v Speaker 3>in the fact that we have so much focused, so

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<v Speaker 3>much innovation, and so much investment going into the technology.

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<v Speaker 2>Another thing you've been talking about a lot this year

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<v Speaker 2>is regulation and the power for changes regulation to really

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<v Speaker 2>bring more companies to market, among other things, save costs.

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<v Speaker 2>How do you feel about the prospect for change this year?

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<v Speaker 2>If the Trump administration, the new SEC, maybe even the

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<v Speaker 2>newest CFTC, if they could do some one thing, one

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<v Speaker 2>thing that would really move the needle, what would that be.

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<v Speaker 1>I don't have one thing on my agenda. I have several.

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<v Speaker 3>So it's important for us to focus both on unlocking

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<v Speaker 3>the potential of the financial industry in terms of making

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<v Speaker 3>regulations smarter. Regulation is very important in the financial industry,

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<v Speaker 3>but there are a lot of probably outdated regulations that

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<v Speaker 3>could be reevaluated. There's a lot of regulation where maybe

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<v Speaker 3>they had their original intent was to drive safety and

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<v Speaker 3>security for investors, but the way they measure it is

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<v Speaker 3>solely on inputs as opposed to outcomes. So how do

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<v Speaker 3>we get more outcome oriented regulation that allows technology to

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<v Speaker 3>be brought in to help solve these problems as opposed

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<v Speaker 3>to having to do it only with you know, just

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<v Speaker 3>you know, adding time and adding people to the processes.

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<v Speaker 3>So there's a lot of opportunity to make the financial

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<v Speaker 3>industry efficient. If they could take ten to twenty percent

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<v Speaker 3>out of just risk and compliance programs, that's unlocking twenty

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<v Speaker 3>five to fifty billion dollars of capital that could be

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<v Speaker 3>deployed into the economy.

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<v Speaker 1>So that's one.

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<v Speaker 3>And then of course making the public company existence, I

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<v Speaker 3>would say making that more efficient and effective as well.

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<v Speaker 1>You know another area too. I have to ask you

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<v Speaker 1>because a lot of.

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<v Speaker 2>People are looking at you and saying, okay, what does

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<v Speaker 2>NAZAC do in the world of digital assets? And this

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<v Speaker 2>is something where I know you've spent a lot of

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<v Speaker 2>time with the rules changing around digital assets.

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<v Speaker 1>Does it change your thinking.

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<v Speaker 2>On how much you may want to embrace them?

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<v Speaker 3>Well, we are a technology provider to the cryptocurrency industry

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<v Speaker 3>by providing trading clearing, surveillance technology now risk management technology.

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<v Speaker 1>To banks who hold digital wallets.

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<v Speaker 3>We also have a financial crime capabilities to support both digital.

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<v Speaker 1>And fiat wallets.

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<v Speaker 3>So as a technology provider, we're very engaged. As a

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<v Speaker 3>market we have the most successful crypto ETFs on NAZAC

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<v Speaker 3>and we're very proud to support that ecosystem.

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<v Speaker 1>As a market operator, we're going to have to.

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<v Speaker 3>Look at how the regulatory environment shapes up, because it's

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<v Speaker 3>really going to be their f I think the SEC

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<v Speaker 3>and the CFTC will be introducing rules of the road,

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<v Speaker 3>you with gearing towards investor protection. And if that's the case,

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<v Speaker 3>then we have very clear rules of the road and

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<v Speaker 3>we see an opportunity for us to be successful and

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<v Speaker 3>to engage our clients in new ways. We will certainly

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<v Speaker 3>consider that, but we already have a heavy engagement in

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<v Speaker 3>the industry today.

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<v Speaker 2>You know, we thank you so very much for joining

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<v Speaker 2>us here on set today. That is Adina Freeman of NASDAK.

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<v Speaker 2>Of course, on the heels of results