Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joining us now is NASVAC chair and CEO Adina Friedman. Adina,
Speaker 2: thank you so much for joining. It's great to be here.
Speaker 2: So many highlights in this from IPOs, coming back to
Speaker 2: your other fintech businesses which are find fascinating, but for
Speaker 2: me to switching to the Nasdaq for certain companies like Walmart,
Speaker 2: coming over your numbers a record one point two trillion
Speaker 2: dollars enlisting transfers. With everybody wanting to become a tech company,
Speaker 2: how many inbounds are you getting for more companies to
Speaker 2: make a Walmart move and become listed on the Nasdaq.
Speaker 1: Well, first of all, thank you so much. It's great
Speaker 1: to be here. And we are really proud of the
Speaker 1: results that we delivered for the quarter and for the
Speaker 1: year with twelve percent growth overall and eleven percent growth
Speaker 1: in our solutions businesses, with every part of our business contributing,
Speaker 1: including our listening's business. And when it comes to transfers
Speaker 1: from the New York stocking change to NASSAC, we really
Speaker 1: focus on several different key differentiators for US. First is
Speaker 1: we are the home to great innovative tech companies, but
Speaker 1: innovators across every sector, and I think that's what's really
Speaker 1: come to everyone's attention, is that everyone is becoming much
Speaker 1: more techl enabled technology is becoming an integral part of
Speaker 1: their innovation story. But you can innovate across industries, and
Speaker 1: these innovative growth companies gravitate to Nasdaq, including Walmart, which
Speaker 1: we were so excited. It's such an amazing, amazing company
Speaker 1: with an amazing leadership. But we also have the index business.
Speaker 1: So we closed the year with eight hundred and eighty
Speaker 1: two billion dollars in our index business, ninety nine billion
Speaker 1: dollars of inflos just in the year. And what that
Speaker 1: does is it allows us, through our partners, to become
Speaker 1: investors in these great companies through the NASOQ one hundred
Speaker 1: Index franchise, and in the case of some companies, we
Speaker 1: could be as much as a four percent owner of
Speaker 1: their shares, which creates a really nice long term passive ownership.
Speaker 1: In addition to the fact, we also have market quality.
Speaker 1: We've invested so much in our technology to drive market
Speaker 1: modernization shows up in the quality of our markets and
Speaker 1: their level participation we have, which is actually become a
Speaker 1: real differentiator for US and particularly these megacap companies. And
Speaker 1: then of first last week, we have all these great
Speaker 1: marketing assets that we do to help promote their brand
Speaker 1: as an innovative growth company. And so all of those
Speaker 1: things combined has really created a great opportunity for us
Speaker 1: to talk to Shopify talk and to Kimberly Clark and
Speaker 1: to Thompson Writers in addition to Walmart and bring them
Speaker 1: to NAZAC in twenty twenty five.
Speaker 3: So your first time over five billion dollars in revenue.
Speaker 3: It's a record solutions sales growth, record index inflows. And
Speaker 3: the one part that I keep thinking about is the concentration.
Speaker 3: I've been thinking about it since I read your piece
Speaker 3: on LinkedIn. Actually more is that a risk that you're
Speaker 3: worried about that there's so much concentration risk and these
Speaker 3: aiivy companies.
Speaker 1: Well, I think the first thing is what we have
Speaker 1: to actually seen is returns start to come be more
Speaker 1: broad based. With interest rates coming down, small cap companies
Speaker 1: over the last couple of years, they've had as much
Speaker 1: as forty percent of their data income have to be
Speaker 1: spent on interest expense. So as the interest rates are
Speaker 1: coming down, the cost of capitals coming down. It is
Speaker 1: allowing them to invest more in their business and deliver
Speaker 1: more for their shareholders. And you are seeing a broader
Speaker 1: based return profile with large cap and small cup companies
Speaker 1: as we go into twenty twenty six, which we're encouraged by.
Speaker 1: But we also do have these great megacap companies that
Speaker 1: are delivering the future of technology to every industry, and
Speaker 1: I think that as a result, the investment that they've
Speaker 1: been making is critically important, very large still though not
Speaker 1: even it's about you know, if you look at all
Speaker 1: of the hyperscalers and the semiconductor companies that I've really
Speaker 1: been investing heavily here, it represents about less than seventy
Speaker 1: percent of their annual cash flows and aggregate, so imagine
Speaker 1: how cash arts of these companies are. So there's a
Speaker 1: huge ballast of cash capabilities in addition to having very
Speaker 1: large scale investors like Blackstone be an underwriter of these
Speaker 1: types of investments, and I do think the public capital
Speaker 1: markets are going to play a bigger role. This investment
Speaker 1: is a change in the infrastructure of our economy, and
Speaker 1: more and more of the industry experts are going to
Speaker 1: be coming in and delivering against that opportunity. So we
Speaker 1: see the capital markets playing a bigger and bigger role
Speaker 1: going forward.
Speaker 3: Can I just follow up on your LinkedIn piece, which
Speaker 3: I thought was fascinating. I think your core argument is
Speaker 3: that this is not some kind of flimsy stock bubble.
Speaker 3: This is a generational sea change like the railroads or
Speaker 3: the Internet. But with the Internet it was both, you know,
Speaker 3: an industrial shift and a bubble, right, Because I was
Speaker 3: looking at the Nasdaq high March of two thousand and
Speaker 3: it took fifteen years to get back there. Okay, now
Speaker 3: we're six x that, But is it possible that we
Speaker 3: have the same kind of delayed, you know, revenue problem
Speaker 3: that we had then.
Speaker 1: So first I would say I was at NASAK back then,
Speaker 1: and so I've actually lived through that experience. And a
Speaker 1: big difference here is that the companies that are underwriting
Speaker 1: the risk and the opportunity are very large scale, well
Speaker 1: capitalized companies. Number Two, when you look at certainly the
Speaker 1: Nasaka one hundred today, the minimum market cap on the
Speaker 1: Nazak one hundred today is about thirty to forty billion dollars,
Speaker 1: whereas back then it was like five billion dollars. And also,
Speaker 1: as you said, the revenue generation. If you look at
Speaker 1: companies that are coming public, these are revenue generating, very
Speaker 1: strong companies that have strong business momentum. KPIs all of
Speaker 1: those things. And so as much as I do think
Speaker 1: that there's going to be a lot of investment here,
Speaker 1: I also think that they're going to be winners and
Speaker 1: losers of course, or as these trends come through. I
Speaker 1: believe that the underpinning of this investment cycle has much
Speaker 1: more capital and much more ballast that underpins it as
Speaker 1: we move forward, and it's a long term trend. It's
Speaker 1: the future of our economy that we are underwriting right now.
Speaker 2: One of the things that's also really transformed in markets.
Speaker 2: I think how much your index business has grown is
Speaker 2: also a testament to this. It's just a wider participation
Speaker 2: of investors, more retail investors, more.
Speaker 1: Happy to jump in the market.
Speaker 2: But a strange kind of like I don't know, step
Speaker 2: child has arisen with it, and that is the prediction markets.
Speaker 2: We had a guest on Amy We've Silverman of RBC
Speaker 2: who framed it as a threat that maybe prediction markets
Speaker 2: grow and people go into there unless into equity markets.
Speaker 2: How are you viewing kind of the booming. I guess
Speaker 2: asset class. I don't know what we want to call it.
Speaker 2: Of prediction markets.
Speaker 1: Well, I think first of all, we are very clear
Speaker 1: that we view regulation as an important ballast and an
Speaker 1: important underpinning of markets really just for the purpose of
Speaker 1: investor protection and all the things that it comes with,
Speaker 1: the guardrails that are really necessary to make sure that
Speaker 1: investors have a sustainable, lasting experience. When you are putting
Speaker 1: your savings to work and you are a true investor,
Speaker 1: the equities markets are an amazing opportunity to find to
Speaker 1: find returns. When you are looking at this more as
Speaker 1: a way to spend your afternoon, that's a different you know,
Speaker 1: it's a different investor type, it's a different use of capital.
Speaker 1: But also even then, the rules have to be clear,
Speaker 1: and I think that's where we've been engaging with regulators
Speaker 1: to understand, you know, how are they thinking about shaping
Speaker 1: the rules. The safety c and the SEC are working
Speaker 1: together better than we've ever seen before, because a lot
Speaker 1: of these prediction markets te kind of in between, and
Speaker 1: so it's a really a matter of how do we
Speaker 1: make sure that the rules of a road are clear so.
Speaker 3: That investors are protected Adeena, great having you with us
Speaker 3: on set today. Really appreciate you joining us Adena. Friedman
Speaker 3: there the CEO of the Nasdaq,