Behind the Scenes at the NYSE: Everything You Want to Know About SPACs, IPOs and Direct Listings

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Slide, Wednesdays with Woodward (registered trademark) Webinar Series. Behind the Scenes at the NYSE: Everything You Want to Know About SPACs, IPOs and Direct Listings. Logos of Big I New York, Travelers Institute, Travelers, New York Stock Exchange, and Big I Connecticut. A woman appears on a video call at the top right corner of the slideshow 

(SPEECH) 
Hello and good afternoon, everyone. Thank you for joining us today. My name is Joan Woodward, and I'm honored to lead the Travelers Institute--the public policy and educational arm of Travelers. 

Today's program is part of our Wednesdays with Woodward series that we started last year to explore issues that impact our personal and professional lives during these very uncertain times. 

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Slide, text, Join our mailing list: institute at travelers dot com. Connect, LinkedIn, Joan Kois Woodward. Watch replays: travelers institute dot org. Hashtag Wednesdays with Woodward 

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We're pleased you're with us today. And we really hope do hope you'll stay connected with us. And you could do that by joining our mailing list at institute at travelers dotcom. 

Connect with me personally on LinkedIn. I'd love to have you as a connection, or watch past webinars and replays, or register in the chat feature. We're going to put in our upcoming sessions. We have a number of upcoming sessions. We'd love you to register for them. And we'll put that in the chat feature now so you can see the registration sites. 

So I'd like to share our disclaimer about today's program just for a moment. 

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Slide, About Travelers Institute Webinars. The Wednesdays with Woodward educational webinar series is presented by the Travelers Institute, the public policy division of Travelers. This program is offered for informational and educational purposes only. You should consult with your financial, legal, insurance or other advisors about any practices suggested by this program. Please note that this session is being recorded and may be used as Travelers deems appropriate. 

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And then, let's get started. We are thrilled to offer a behind the scenes look at the New York Stock Exchange today with my friend Amanda Hindlian. 

The New York Stock Exchange serves as the world's largest equities exchange, where modern day business innovators and disruptors can capitalize on opportunities in the public markets. 

Traveler's IPOd on the New York Stock Exchange in March 2002, which at that time was the biggest insurance IPO ever. A few years later, in June of 2009 while the financial market was in crisis, we actually joined the Dow Jones Industrial average as one of the Dow 30 components. 

Since our 2002 IPO, we've increased our net written premium from nearly 150% from $12 billion to $30 billion. And we increased our market cap from $10 billion to nearly $40 billion today. Twice, I've been lucky enough to be part of the bell ringing ceremony on behalf of Travelers, including last February--just a year ago, right before the world locked down--when we rang the bell to celebrate the 10th anniversary of the Travelers Institute. 

We decided to capture that experience virtually here for all of you today, as a fun look inside the New York Stock Exchange--but also importantly to provide an update on the financial markets and what's going on in the markets this year. 

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Slide, Speakers. Pictures of Joan Woodward, Executive Vice President, Public Policy; President, Travelers Institute, Travelers and Amanda Hindlian, Global Head of Capital Markets NYSE Group 

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There's no one better to talk about this. And we're honored to have Amanda Hindlian as our guest. 

She serves as the Global Head of Capital Markets for the New York Stock Exchange Group--a subsidiary of the Intercontinental Exchange or ICE. And she's going to be our guide for the next hour. 

So Amanda oversees a team responsible for attracting new listings--new companies to the exchange. She works with entrepreneurs, venture capitalists, private equity firms, investment banks, to advise private companies as they move toward these public listings--whether it's traditional IPOs, a SPAC or combination, or a direct listing. 

We will explore those distinctions and the latest trends that you'd want to watch for your business and your clients. Prior to joining the NYSE, Amanda was a former partner and Chief Operating Officer of the Global Investment Research Operation at Goldman Sachs. She also served as President of the firm's Think Tank, The Global Markets Institute--a job I also held about 13 years ago. 

I'd like to thank our partners today for the program, which includes the New York Stock Exchange. But also, a special thanks to Amanda's colleague, Joe Tama. Joe Tama has been incredibly valuable for us. He's the Exchange's Head of the Northeast region. Thank you Joe for all of your help and everything you've done for us. 

We're also delighted to have the Big I of New York, and the Big I of Connecticut with two really fantastic organization representing independent insurance agents here in the Northeast. A special welcome to all the Big I members joining us today. 

A note on our agenda--Amanda will be begin with some opening comments. And then she and I will reconvene for a moderated discussion. And after that, we're going to take your questions. So get your questions ready, and go ahead and put them in the Q&A function at the bottom of your screen there. If you don't want me to read your name, click anonymously, and I won't do that. 

So to kick off Amanda's presentation today, she brought with her a really interesting video--a short video. So let's go ahead and roll that. Thank you. 

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A crowd standing outside a building waves and cheers. A banner appears on the front of the New York Stock Exchange building. 

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[MUSIC PLAYING] 

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Text, Come for the original Opening Bell. 

Inside the building, a large golden bell hangs from a columned balcony. Text, Stay for the community of icons and disruptors 

Crowds walk through the room, passing kiosks. Logos of various companies appear on the screens hanging above the kiosks. Charts and lines of text appear on other screens hanging on the walls. A group standing on the balcony applauds. Text, With industry leading trading technology and the most deterministic results. 

A man wearing a face mask types on a keyboard, looking at one of the several computer monitors in front of him. Other people sit in the kiosks, surrounded by monitors. Logos and market information for various companies appears on the screens hanging from the top of the kiosks. Text, The leader in capital raising for tech companies 

Text appears on a screen outside the building, Launch It. Inside, the kiosks sit empty as logos for ICE, Citadel Securities, and Double Verify appear on their screens. Two men pose together for a picture. Text, Welcome to the world's largest stock exchange 

Outside, a woman dances as a band plays behind her. A man in the crowd pumps his fist. 

Banners hang on the front of the building. Fireworks explode over the crowd, sending streams of white smoke and golden sparks upwards. The crowd raises their fists into the air 

Text, NYSE. Exchange your expectations 

Amanda joins Joan on the video call 

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Well, thank you so much Joan for having me today, and to the rest of the Travelers Team. It's really a pleasure to be here. And particularly because as Joan mentioned at the outset, we are actually former colleagues. So this is very, very fun for me. And I hope all of you can see and feel the energy from just that very, very brief video clip. 

What's so interesting about that video to me is it just shows the tip of the iceberg in terms of the client experience that we offer here at the New York Stock Exchange. And we do some of the most interesting and exciting work out there. 

In fact, last week, we had a founder taking the company public. And the founder turned to me and said, do you have the best job in the world Amanda? And I actually couldn't really say for sure, but I said to her, You know, I think it's actually up there. So I'm a very lucky woman. I have fun day in and day out. And I'm blessed with a wonderful job. 

When I talk about what it is that the New York Stock Exchange does, I like to frame it in the context of the role that we play in the broader economy. And so from my perspective, we really serve two critical functions. The first is that we match those who need capital with the suppliers of that capital. And this process really enables companies to grow, so that they can add jobs and benefit the growth of the overall economy. 

And then I would say the second core thing that we do is we help ensure the smooth functioning of capital markets by matching buyers and Sellers of securities. And I think in part because of the work that we do, American capital markets are today the most deep and liquid markets in the world. 

And what's more about the New York Stock Exchange--and you saw this again in the video and heard Joan talk about this and some of her opening remarks--is that we're the world's largest exchange. But I would also say we're probably the most storied, meaning that we have a tremendous history. We have an iconic platform. We have an iconic and really interesting building that is somehow this beautiful marriage between modern and historic. So that's a wonderful element of our business. 

And I would say, today--and this is part of the discussion that we're going to have--is really an interesting and exciting time to be involved in capital markets because we continue to see significant innovations in the way companies choose to access capital. 

And as Joan said, that's whether they're taking the Avenue of a SPAC, a direct listing, or a direct listing with a capital raise, which hasn't been done yet but is certainly in the works. And obviously as the title of today says, these are topics I'm really looking forward to discussing in more detail. 

The other thing I would say about the New York Stock Exchange is that we continue to see really fascinating disruptive companies doing new and innovative things to tap the public capital markets. We also see a steady flow of highly mission-driven companies. And these are companies that are making other elements just as important as generating profitability and doing well financially--such as protecting the environment. 

And it's a really interesting from my seat to see so many companies with a strong ethos around them in terms of their values come to the markets and look to tap that public capital. This week alone, I would say, I've had two unique issuers tell me that they value doing good above doing well. And I find that to be a really positive statement about where we are in terms of our overall development in the capital markets. 

And then, of course, we get to do amazing things at the New York Stock Exchange, like work with companies like Travelers. And so with that really high-level and brief overview, and with all of this in mind, I very much look forward to today's dialogue. And I'll turn it over to Joan. 

Great, Amanda. Thanks so much for those opening comments. And we're going to do something now with our audience that we've only done a few times before. We're going to ask you a question, and we're going to do some live audience polling. It's pretty simple. 

So the first question we have for the audience, the New York Stock Exchange traces its origins back how many years? 

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The poll question appears at the top of the video call The NYSE traces its origins back how many years?. Answer choices, 115, 160, 205, and 230 

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So just take a guess. it's a long time as we just talked about. It's one of the first exchanges in the world. And so what is the answer here? We're getting different mixed reviews. 

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Audience responses appear in percentages 

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It looks like most people are, saying, Amanda, it's 160 years old. 

That is not correct. 

Not correct? 

More up. 

More? More years old? 

Yes, that's correct. It's about 230 years old. So we've already celebrated 229th anniversary. We are quickly approaching 230 years since inception. And what's really interesting is that the New York Stock Exchange was actually started on Wall Street by a group of merchants and stock traders, who began to do business with each other under what at the time they called buttonwood trees, which are now known as the Sycamore tree. 

And that group eventually transformed into a business that transformed over time into what is today, the New York Stock Exchange. And the building that the New York Stock Exchange is in--just for another little fun fact as it relates to timing in history was completed in 1903. And, of course, it's been through numerous upgrades over time, and is as modern as can be inside. But I think that's also an interesting historical factoid for folks. 

Great, great. So give us an overview. You walk through the building in the morning. Explain your role. You help companies become public. What does a typical day look like for you? What's the most exciting part of your job, Amanda? 

So everyone says this, but it really happens to be true. There is no one typical day. But I would say, there are a couple of constants throughout the course of my day. One of them is I have to go through tremendous security to get into the building. And once I do, there is a sense of energy, enthusiasm, drive, excitement, that's almost palpable and sort of tangible in the air. 

Because our morning will start every weekday with an opening bell that marks the opening of the entire market. But we also, during that process, are quite often taking new companies public for the first time. And when we do that, we usually have those companies--now during COVID times, it would tend to be virtual. Today, we're moving more and more into having people come back into the building and back into the space, or use a hybrid model of virtual or in person. 

But we're bringing in the founders of companies, their management teams, their investors and sponsors, others who have helped them be successful over time. And they're coming into our building to really mark--not only the opening of the market--but to be here for their first trade bell. And to really get to experience the excitement that Joan you've mentioned from being on that bell ringing podium two times yourself already. 

It's really a thrilling moment to be there and to kick off the day and to kick off the bell. And I, I personally see so much emotion in the faces of any executive, any founder, anyone who's worked hard enough to get to the point where they're ringing the bell. There's just a tremendous amount of excitement, enthusiasm, and emotion on their faces at that moment in time. 

And so my morning is almost always started with something that is just extremely fun and energizing. And then over the course of the day, I'm going to spend with a tremendous amount of clients. And that goes to your question, Joan around what my role actually is. 

So I really consider myself to sit at the intersection of public markets and private markets. And what we do as a core element of our business and in markets is we work with the entire ecosystem in the private market sphere, whether it's the founders of companies, the private equity firms that have backed them, the venture capital firms that have backed them. Their different advisors, banks and others. Even their counsel, we work with that entire ecosystem to build long-lasting client relationships. 

And our goal is really to serve as an advisor to clients as they look at going public in whatever manner and which is most beneficial and interesting to them. And so we build those relationships early and we cultivate them over time by serving in an advisory capacity. 

So I can in any given day talk to probably a minimum of--it would be strange if a day went by and I wasn't talking to at least three clients. And usually it goes up from there. So the close of the day is marked by the closing bell as you would imagine. And that's also equally as exciting. And sometimes I find myself coming home and feeling so adrenalized that I need an hour just to settle back into normal life to manage my two young boys. So it's really that exciting of a job. 

That's terrific. And you mentioned private equity. And there's a lot of private equity money sloshing around in the insurance space, actually with private equity getting very much involved in buying brokerages and agent groups. So we'll get into that in a minute for all of my insurance friends on the line. 

We're going to do another audience polling question, and this will be our last one for today. And then we're going to get into, markets and how they're working. 

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The poll question appears, On average, approximately how many IPOs were recorded annually in the U.S. over the last decade?   

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But on average, approximately how many IPOs were recorded annually in the US over the last decade? 

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Answer choices, 100, 150, 200, 250 

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So we're just looking at the last 10 years, kind of since the financial crisis. How many on average were recorded annually? And then we're going to talk about what happened during the pandemic too. So what are the results coming in out of here? 

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Audience responses appear. 

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So we get about 200. It looks like folks are saying maybe 200 on an annual basis on average. What is the correct answer there, Amanda? And what have you seen in the last couple of years during the pandemic? 

It's a great question. So on average, the number is roughly 250 IPOs coming to market in a given year. But because of the sheer volume of deals that we've seen between 2020 and 2021, I would say that number is a little bit skewed to the upside over the course of the decade. 

So for both 2020 and 2021, 2020 was around 500 IPOs. 2021 is looking to track at a number that's probably going to be higher than that. Of course, we can't really predict with certainty because we never know what will happen with overall market conditions. But the sheer volume of activity in capital markets and companies seeking to go public has been incredibly robust over the last two years. 

OK, interesting. So what is the attractiveness for a company to go public and join the public markets? What's the case versus staying private because there's a lot more regulatory scrutiny. There's quarterly earnings reports the companies have to do once they are public. So has that calculation changed of companies trying to go public? 

It's a great question. Look, I think that for an extended period of time here, we've seen tremendous growth in the size and influence of the private market private markets and private capital funding. And what that allowed over a prolonged period of time to occur is that companies chose to stay private for longer. And they didn't struggle with getting the capital in general that they needed in order to grow their businesses. 

What we're finding today is that it is affordable and desirable for companies to choose to go public, given where rates are and what the cost of capital looks like. And because they've been private for so long, they, many companies tend to have existing private shareholders that are actually looking to unlock liquidity, and can't do that easily without having some form of an initial public offering, and going to the capital markets to tap those markets for additional capital. So I think that's a really important trend. 

The other thing I would say is that simultaneously, you've seen all of these innovations occur in capital markets. And so, whether it's SPACS or direct listings, all of a sudden companies are saying, well, not only could I do a traditional IPO, but I have these other mechanisms that I can use to go public, and maybe that changes the calculation for me as well in terms of what's in the best interest of my entity financially. 

So I think that's kind of how the dynamic has changed over time. And it underpins much of the volumes that we've seen in capital market activity over the last two years. 

OK. It's really interesting. So why would a company choose to list on the NYSE? There's lots of other as you know exchanges out there. But what's the value proposition? What are the differentiators to list on the NYSE? 

So, the New York Stock Exchange is truly unique and truly distinct. And there are a couple of elements that differentiate the exchange from any other. One of them is the fact that we have a unique trading model. And sometimes when you talk about this, people's eyes gloss over. But if you can look at insurance, you can look at our trading model and think it's interesting. Because, trust me, they're both technical and interesting areas to explore. 

So we have what we call Designated Market Makers on our trading floor. We also simultaneously have some of the best, most deterministic trading technology on the market. What we managed to do is pull together both the best trading technology you can find, and the human oversight via the Designated Market Maker to ensure that if there are rough spots in the market, issuers that list with the New York Stock Exchange have a smoother trading operation because of the obligations of those Designated Market Makers. 

Those Designated Market Makers do not have the same obligation to commit capital and to be in the order book for an issuer that's listed on the New York Stock Exchange anywhere else. 

So that is really--and I'm happy to get into more detail there. But that's really a fundamental differentiating point for the New York Stock Exchange. The other is that we have an unparalleled community of listed companies. And you see it here today with Travelers and our partnership and what that looks like on an ongoing basis. 

We at the New York Stock Exchange view ourselves as always here to assist our listed companies. We have over 2,200 of them globally. And our community employs over 43 million people all over the world. 

When you get the power of that network and all of those companies together, and you start to make introductions and connections, and provide platforms for companies to share, advice, counsel, thought leadership with each other and with a broader community, that community tends to kind of build value onto itself over time. And it's really a community of integrity and trust. And so that's a very fundamental underpinning point for us as an exchange. 

And then, additionally, we really work with each issuer that comes to us to try to find the right long-term partnership with them. A partnership that aligns with what they're looking to achieve--what their goals are from going public. Because as we talked about already, companies could have different reasons for wanting to tap capital markets. 

So we really work closely with companies to ensure that we're giving them the visibility they want in the right way on their listing day. And that we're doing that with them over the long-term. And that we're creating a really strong long-term partnership that covers not only marketing, not only media, but also really trying to drive fundamental revenue, growth, exchange of ideas, et cetera over time. 

So I think those are the three really differentiated pillars of the New York Stock Exchange. And I don't see a reason to list anywhere else. 

OK, well thank you for that. Designated Market Maker because as you talk about the smooth volatility in the price of the stock. And that is one of the values as you say listing on the NYSE. And so we might dig back into that during the Q&A. 

And Joan, I would just say that because of our Designated Market Maker Model, we tend to have 20% less volatility across the exchange on average for our listed companies. So you see it play out in the metrics in a real way. 

Great. Fantastic. So let's talk technology. Technology has changed the world in the last 20, 30, 40 years. Having this innovation agenda that allows for a better and more efficient service is really critical right for your business, for our business. At least at Travelers for example, we're really leaning into digital enablement. And AI is a big part of other capabilities really to help our agents and brokers to better serve their customers. 

So what is the NYSE doing in terms of innovating and maintaining that position as the world's leading Stock Exchange? 

That's a great question. I think it's really important in today's business to almost always ask that question. So the first thing I would say is we're very nimble, agile organization at the New York Stock Exchange. And that's reflected in all of our technology and the way in which we operate in the smoothness of the functioning of our capital market. 

The other thing I would say--which you noted Joan at the outset is that the New York Stock Exchange, despite being 230 years old as we learned from the polling, is actually a founder-led organization. And I say that because we are owned by Intercontinental Exchange. And Intercontinental Exchange as our parent company was founded roughly 20 years ago, and is based on having the best technology in the market. 

And Intercontinental Exchange more broadly owns clearing houses--owns various exchanges, not just the New York Stock Exchange across different markets in different types of securities. But really interestingly and importantly, it is one of the world's largest data providers. 

So data is at the core of everything that we do at the NYSE. And we really benefit from having ICE as our parent company allow us to do that at scale. And when you think about the value proposition that I outlined earlier, and what it is that we offer to companies that list with us, one of those benefits is access to our data and our information. 

So for example, we have a really interesting ESG effort, where we are aggregating, collecting, and organizing, and synthesizing thousands and thousands of disparate unique data points as it relates to ESG metrics across thousands of listed companies. And synthesizing that information in a way that's digestible for our broad client base. Whether we're talking about listed companies, potential issuers, or we're talking about investors who are trading with us. 

So, you know, we really have this interesting combination of being a unique iconic brand that is part of a modern technology-driven organization. And so that's embedded into everything we do all day every day. 

You know, it's really interesting you mentioned ESG because as you know, when the Business Roundtable came out with their statement that its stakeholders that are customers not just shareholders, that really changed the paradigm--the Milton Friedman paradigm that shareholder value should be put first. 

And so with you're taking a look at data across all of these different companies, public and private and serving that purpose to evaluate ESG outcomes or goals for companies, I mean that is truly a valuable proposition. Because as you know, an ecosystem has grown up around ESG. And companies are struggling, I think public companies, private companies, small mom-and-pop insurance agents--they're really trying to struggle with understanding what ESG means for them and how they interpret it in them. 

We at Travelers embed that in our business every single day. But talk to us a little bit more about other companies and how they view ESG matrix. There's a lot of raters and rankers out there. Should we be paying attention to the people that are judging us on ESG core values? How are you saying it in other public markets? 

Well, let me start first by saying that ESG and the notions and the values that underpin ESG are one of the core tenets of the exchange. So we operate in a manner that we think is consistent with having forward leaning values in the space. So for example, we have a board advisory council. And it really is a group of CEOs of listed issuers that are on the New York Stock Exchange, who come together to talk about, and vet, and share candidates for board seats who have different and diverse backgrounds. 

So that any time a new company for example, comes to us and says we're looking to go public, we can say to them, great, one of the things we can help you do is not just tell you how important it is that you have a diverse board that reflects different opinions, different backgrounds, different styles, different educations. But we can actually provide you with the names of people who we can pair you with, so that you can round out your board in a really meaningful way. 

From a broader perspective in moving away from the New York Stock Exchange, where frankly between ICE and the New York Stock Exchange, together we hold ourselves accountable to a lot of different ESG metrics. I would say it's really interesting for me personally to see this evolution in the market of as you said Joan in the sort of Milton Friedman model of must do well and everything else follows in terms of stock performance and financial performance. 

What we're seeing more and more is that investors with that excess capital that we talked about who want to deploy that capital don't want to just deploy the capital to companies that are generating profits, but are doing so with a really high cost to the rest of society. Whether that's environmental cost or other. 

And so you're seeing as Joan said, more investment dollars head into the ESG space than you've ever seen before. Europe and London were ahead of the US in this arena for years. The US is starting to catch up. And someone can correct me if I'm wrong about this fact. But I think now, today, something like one in three investment Dollars has some sort of an ESG mandate associated with it. 

So what I would say is, you can't ignore ESG. There's too much capital behind it. It's too important, and it's too much of a fundamental shift in the way companies are thinking about doing business going forward. 

And I would also say you don't want to. And the reason why you don't want to is because most of the research--most of the work that's been done shows that companies that have strong ESG metrics and initiatives are companies that actually do tend to perform better anyway over time. And that the benefits of things like having a more diverse board for example, tend to bleed into the rest of the organization in ways that are really powerful and instrumental over time. 

So I think it's a space that's despite its size and despite its importance, still in many ways as you said, Joan, emerging. There are different entities involved in rating. The data collection and analysis can be quite disparate. You're seeing a lot of tangential or associated industries pop up around the notion of ESG. That makes it hard to kind of navigate for companies to decide what's relevant and what isn't. 

But I think at the end of the day, the onus is on all of us to both help companies navigate through that, and to navigate through it ourselves. Because on the other side of it, what we're hoping for and looking for is really a better, brighter future where everyone involved from a corporate perspective is thinking about how to be not only a successful company but also a good global citizen. So I know it sounds a little mushy. But I think it's terribly important. 

Well, thank you for that. It is an area, I think we'll be exploring over the next decade to come. All right, now let's get in the weeds. Let's talk details. Let's get into the markets. We want to talk about your market outlook and what you think has happened during the pandemic. And more importantly, where we're headed with the markets. 

But first, let's do a foundational understanding of some of these acronyms we're talking about. So why would a company choose an IPO versus a SPAC, which is a Special Purpose Acquisition Corporation, right, or a Direct Listing? Can you just explain the difference between those and the advantages may be of doing a SPAC, because those have really taken off. 

They've been around a long time as you know. But in the last year, the SPAC activity has just really picked up. So give us kind of the definitions, and then the advantages of doing one or the other. 

Absolutely, so this is where I get--I think this is really interesting. So special purpose acquisition companies, as you said, have been around for a long time--at a minimum since the 1990s. And what they were historically called or thought of--they were thought of as blank check companies, and that's really because a SPAC as we call them is a holding company. And that holding company contains the funds that have been raised from an initial public offering. 

But during that initial public offering, the capital that's being allocated to the SPAC from the shareholders is really being given to a small sponsor team. And what the shareholders are saying is, I really trust you, the sponsor team to go out into the market and assess companies that would be really interesting prospective candidates to go public. 

And the sponsor will in some way, shape, or form have a unique advantage in doing that vetting and coming up with really interesting companies to take public. What's so interesting about that is that the number of SPACS that we've seen has just been sort of astronomical in terms of the sheer volumes that have taken up over--that have come up over not only 2020 and part of 2019, but Q1 2021 was probably the peak in terms of SPAC volumes. 

At the point that the SPAC finds a business that it thinks is interesting, compelling, and ready to take public, that's SPAC shareholders have the right to bow out. They have the right to say, you know what, I'm going to redeem my cash, and I'm going to walk away earning a yield on that cash. And I'm not going to choose to invest in the business that's being taken public. Other shareholders are going to say, yes, this is fascinating. I'd like to convert into being a shareholder of that company. 

The reason why some companies choose to go public through the root of a business combination is because it can be much faster than taking a traditional path of going through the IPO. And that's just because they're subject to different requirements. So it's a really interesting means, mechanism by which companies can choose to go public today. 

And I tend to think of that de SPAC process which is also sometimes referred to as a business combination as really in many ways, even though it's structured technically--and I won't get into the weeds on this because I'll bore you to death--as a reverse merger. I really think of it as like an IPO because it really is for the company itself the first time the company is going public. So that's one category of new innovations in the market. Again, not new, new, but that have evolved and become really popular over the last couple of years. 

The second bucket is what we call Direct Listings. And the New York Stock Exchange was really the pioneer of Direct Listings. We worked really closely with the SEC and early issuers of Direct Listings for multiple years to ensure that this was a mechanism that could actually ensue and unfold in the public markets in a way that was safe and had the appropriate guardrails in place. 

And so what a direct listing does is we often talk about the pop that occurs in the stock price on the IPO day. That pop is a reference to the fact that the deal the IPO itself priced the night before. And then, when the stock begins to trade the next day on what they call the listing day, that stock can open up 20%, 30% higher than the pricing that occurred the evening before. 

The pricing that occurred the evening before is an amalgamation of supply and demand and an order book as pulled together by a syndicate of investment banks, typically. What ends up happening the next day is that the pricing gets determined by the entire market at large. 

If you're the company who does a traditional IPO, and you leave that pop in the share price on the table, you can feel kind of disappointed and happy all at the same time. Disappointed that you weren't able to raise more capital because the market would have paid you a higher valuation for your company. Maybe exciting and enthused because you are also simultaneously watching your stock do well on the first day, which is a wonderful thing to see. 

Fundamentally what the direct listing allows companies to do is not only capture that first day pop and share price, but you can also not raise additional capital. Instead, what you can do--and we talked about this earlier--is say you know what, all of my employees who have shares, my private equity and backers that have shares, we're going to give you this opportunity to liquidate those shares in the market. And the company is going to become publicly traded as a result of that. But the company may not raise new capital in that process. 

The direct listing has evolved over time and late last year the New York Stock Exchange received approval from the SEC to also start to do direct listings with capital raises. Now, that has not occurred yet. And yet I would say is very much an active dialogue that's ongoing for us with multiple issuers along with the SEC. 

And I think it's another innovation that will probably take a bit of time to unfold in the markets. But when it does, is something that will become just another form of choice for companies as they think about their capital structure and how it is that they want to look, feel, and operate on a go forward basis and. What's in their best interests. 

So hopefully that was a high enough overview. But if there are other questions, I'm really happy to talk about them. 

No, I think that was perfect to give us a base of understanding what the difference is between IPO, SPAC and direct. So I'm just going to remind my audience, friends go ahead and put your questions in the Q&A. We have a couple coming in but we'd love to have more. So add your questions to the Q&A function there. 

So, Amanda, in the meantime, walk us through the timeline. So obviously you mentioned the investment banks get together. They're chosen by the company. They create a syndicate to take your company public. But the timeline that a company decides to go on your exchange versus another exchange. How long does that take to that decision? And what's changed over time? Has it gotten faster, or has it gotten slower? 

It depends issuer by issuer. In general, I would say on average, it's gotten faster. And that time period has compressed. One of the reasons why is actually the virtual world that we're engaging in today, where issuers are now able to do what we call the roadshow, where they sell their story, their company to an institutional investing audience and a broader audience. They're able to do that electronically, and that can save them time in terms of flying city to city. They may be able to pack in more investor meetings in a single day. 

So that has actually helped to kind of speed up the process a little bit. Typically, what we say is that you want to pick an exchange, have your investment banking advisors in place, have any other advisors, including a general counsel that you intend to use in the process in place, at least six weeks in advance of whenever it is that a company intends to go public. 

And I really mean at least. It's better to do it earlier and to particularly engage from a banking side, and engage with the syndicate as early as possible in the process. Because they can be really helpful advisors. And this is certainly true as it relates to my alma mater in helping companies think about what structure may make the most sense for them. What timing may make the most sense for them. How they might need to think about their valuation. 

How they might need to think about shaping the narrative around their story in a way that's really compelling to institutional investors. A company may have been laser focused and probably should be for the time leading up to being ready to become a public company on its business--its core business day-to-day. 

And I think over time, the advisor can really be important in helping the company start to think not only about its core business, but also about what it wants to look like as a public entity. So it has sped up over time. The volumes in markets--I would say will and the volatility in markets will almost always create some degree of variability and uncertainty. 

And so, you never know. A deal could speed up, and a company may be ready to go public. And then may decide along with its advisors and us at the week before or days before that the market doesn't feel strong enough, or there's another reason why they want to wait. 

So it's a fairly variable, flexible time-frame. And one of the things I'd like to say about the New York Stock Exchange is we, despite all of that uncertainty-- and I'm not even sure I fully understand how we do it-- seem to make it all come together. So it's a lot of moving pieces and a lot of uncertainty as soon as you involve capital markets in any decision that you're going to make. 

But the group of us--the team of advisors, the exchanges, we really end up making it work for companies in the end. And most companies are extraordinarily happy with going public. And our customers are thrilled to be a member of the NYSE. 

Yes as we are for sure. OK let's talk--we're going to get to the questions I have to a two-part question for you, and we're going to go to audience questions. So it's about the pandemic. And it's about financial markets since the pandemic. So we want to get your market outlook and hear your thoughts around what the Fed did, and did they do enough? Was it quick? Was it slow? What they're going to do in the future. But first, let's talk about more logistics. 

Though the market shut down, we all went home, like literally overnight. How were you bringing people back into the office? Those Designated Market Makers for sure need to be on the floor or doing their thing--the floor of the exchange. And their little pods, maybe you can explain a little bit how the pods work there. But how are you bringing people back? How did you send them home? And someone asked the question, I'll just ask it now, are you open now for tours by the public? So that's another question we had coming in. 

So, it's a great question. Look, we did what businesses should do, which is put the health and safety of our people first. And so, we--this was before I joined the exchange, but we did close our trading floor because of the pandemic. We sent our traders home and all of our people home. And executed really quickly and rapidly a very robust and solid work from home strategy through the pandemic. 

We also put in place things like testing centers, support for our employees if they were to get sick. And really, again, we feel that we represent in our part of a community where trust and well-being and things that are core values are really fundamentally important. And that was our underpinning thought. And it certainly drove the actions that we took. 

What's interesting is that I don't think any of us necessarily expected that with the pandemic taking place as it did, and the high level of uncertainty surrounding the pandemic, that you would have simultaneously seen the type of activity that we've seen in financial markets. And Joan, that goes, I think directly to your point around what actually happened here and what did the Fed do. 

My own opinion, and it is my own is that the Fed got involved very early on in helping to stabilize markets more broadly with its rate policy and other measures. And that as a result of that, equity markets actually stabilized very quickly, and probably very quickly from even a historical perspective. 

And companies found themselves in an environment in which not only were the markets strong and open for capital market activity, but they also saw this convergence of these new innovations come together all at once. 

I don't have a crystal ball into what the future holds. So I couldn't tell you today with any certainty what market activity will look like going forward. But I can tell you that if our pipeline is any indication of what market activity will look like, it's robust, and solid, is and appears to be remaining so at least in the near future. 

So you know, again I think a lot of it is companies that were private for a long period of time. A lot of it is SPACS that are now looking to take companies public, and the volumes associated with that. But in general, I think it's a good thing because I think it really allows for the democratization of markets. Meaning that more people in more ways are able to participate in the upside success of institutions that choose to go public by putting their own capital to work. 

OK, that's terrific. So audience questions. We have a bunch coming in. We'll do rapid fire, if that's OK. First question. What are the pros and cons of stock splitting? Why are some companies like Amazon not doing it? 

Look, from my perspective, it's not that complicated. It's a relatively simple process to do. I think a lot of companies think to themselves, why would I? There has to be a really good reason why I would. The argument for doing it is well, a lower share price could actually attract more investors. 

The counterargument is, does it create any kind of instability in the markets when you go through the process of doing things like splitting shares? I'm agnostic. I don't to see it and I haven't over the course of my career as being a particularly defining moment for a share price on any side, either up or down. 

And I think that's a lot of the reason why companies don't do it. Because it, there isn't--it isn't necessarily clear what the value of doing it is, other than if you were to have a share price like Berkshire Hathaway that bumps up against the upper limits of what existing technology is able to support, fortunately, at the New York Stock Exchange, our technology is more than able to support Berkshire Hathaway and other highly priced securities. So it's just not a concern from our perspective. 

Is it though? I think the argument is some people view it as more retail investors couldn't get into a stock that's 100 bucks versus 2000 bucks a share. And so you attract more retail investors, is that the thinking? And do companies care more about retail investors or institutional investors in that way? I mean, I think in general, its you can get more investors if the price is lower. Right, and, of course, some element of that is getting retail investors into the stock. 

Retail investors--companies either want them or don't. And it varies company by company. Many companies prefer to have institutional investors in their shares because they feel like those institutional investors are sophisticated in terms of their supervision, regulation, and understanding of the markets. And therefore, are better placed to take positions in their shares. 

However, I think so long as the disclosures are adequate, and retail investors understand what it is they're investing in. And again, the guardrails are in place to protect retail investors, I think more retail involvement in the market is again generally a good thing. But I hear different things from different companies every day. People just tend to have different perspectives and views on it. 

OK, fair enough. Fair enough. OK, another question coming in from Sean Ramalho. Cybersecurity is a very big concern in today's environment. Is there a high priority to ensuring the NYC is protected itself. And then further, are you advising your listed companies how to be protected in this space? 

So I was actually joking with Joan before I dialed into this Zoom meeting that sometimes I feel like I work inside the Pentagon, logging into anything NYSE related or even getting through the security into the building. And that's the security--they know me. And it's Hi, Amanda, still you're going to have to ring your bag through our viewer. 

So yes, cybersecurity is unquestionably an incredible focus for not only the New York Stock Exchange, but also for any exchange and frankly for any public company. And the risks associated with cybersecurity are high and worrying if the right controls are not in place. I feel very confident and really assured of and in the controls that the New York Stock Exchange has in place to prevent any type of cyber-attack. We certainly talk to companies inside of our universe about how we can help them as it relates to cybersecurity. We share best practices, we hold panels talking about issues like this where we allow leaders in different fields to come together and talk about what it is that they do to help protect their companies. 

So you know unquestionably, it's not only a focus for us as an exchange, but it's also an area where we will happily and frequently take the time to talk to our listed companies about what kinds of best practices and other controls they too can put in place to feel confident that they're as protected from cyber-attacks as they can possibly be. 

OK, great answer. Another question coming in, does the NYSE care if a company wants to IPO while demonstrating consistently negative revenue streams, or have no revenues for many years? How do you think about IPOs a company that has negative revenue streams over a number of years? 

So I love that question because I would say if the New York Stock Exchange had any ding against it, in terms of the way people perceive it, that's just, in my opinion, completely incorrect. It would be that the exchange hasn't been home to tech and biotech because we have more stringent listing requirements as it relates to revenue and cash flow. And that's just incorrect, it's fundamentally wrong. In fact, from a tech perspective, the New York Stock Exchange has raised two-thirds of all tech IPOs globally since 2014. And the reason why I point to 2014 is because prior to then, the NYSE did have more stringent requirements around whether companies had revenue and positive revenue and positive cash flow. 

Since then, the NYSE has taken, what I think, is an accurate view of you know let the market decide. Markets are there to help determine prices, to help determine the clearing point for any given institution whether it should go public and at what value. And market should therefore be the ones who assess whether a company should be public even if it doesn't have revenue or cash flow. So, since 2014, since we eliminated some of those requirements and modernized our listing standards, we've seen a tremendous boom in tech activity at the NYSE. We also more recently have started to see some significant activity in biotech at the NYSE. 

And that was historically also viewed as an area of relative weakness for the exchange which is no longer true accurate or correct. And when I say that, what I mean is that, for a long time, a competitor exchange had a Biotech Index which would only allow a biotech to be included in the index if it were also listed on the exchange. New York Stock Exchange through our parent company, ICE, now has our own ICE Bio index. 

And many of the assets under management that we're tracking the other Biotech Index are now tracking ours. In fact, the vast majority of assets are now tracking our Biotech Index. So between the modifications we made to our listing standards and a few other things that we've done, including creating and generating the ICE Bio Index, we are now extraordinarily competitive in offering a competitive environment for biotech companies as well. 

OK, terrific. Another question for you coming in from Greg Ewing. What goes into deciding if the NYSE will or will not accept a company's IPO for listing on the NYSE? And maybe here you can talk about what the SEC requires versus what you require, how it's different. You're not a regulator, right, if the SEC is a regulator of public companies. 

The SEC regulates us and in some ways, we serve in a regulatory fashion and that we enhance and we enforce our own standards as well. We also enforce standards on members of our exchange, meaning members of the trading floor. So, to your question Joan, I tend to think of us as being regulated and in some ways as also being a regulator. In terms of the general listing requirements and whether the New York Stock Exchange thinks the company is appropriate to go public, we have a couple of really basic requirements. 

For our share price 400 round lot holders, we like to see that there's a reasonable free float for an offering in the market. And when we say that we also mean that, the free float has, doesn't have a concentrated number of shareholders which would make the stock really illiquid at the moment of hitting the market. We don't like to see those types of dynamics. It doesn't lead to good trading activity and it usually doesn't lead to good outcomes for the issuers either. So we have an independent regulatory arm that as part of the listing process will review every single transaction before it is approved to list on the New York Stock Exchange. 

Typically, it's highly, highly unusual for us to run into a problem where a company is in discussion with us and in dialogue with us and ready to go public, and all of a sudden finds out that it doesn't in some way meet our listing requirements. That's really uncommon. It's a very, very unusual circumstance that would lead you into that situation. Usually, in my team does this and it's my job as well, we vet companies soon enough to make sure that they're going to come in line with our own listing requirements. And so that there aren't any unnecessary kind of surprises for companies at the end. 

The SEC has its own standards and they're vast and they're robust and they relate to issues beyond what we care about, such as financial controls like Sarbanes-Oxley controls. The disclosure requirements, we look at these things too but they're not they're not necessarily always binding constraints for us. But the SEC has a very broad list of things that it looks for in an F1 whether it's a domestic issue or foreign issue in order to decide whether that company should be going public, and has met all of the standards required to do so. 

So that's a different process and often involves a lot of Q&A and back and forth pre-public filing with the SEC and the company itself. 

All right, terrific. Amanda, we have a bunch of other questions coming in for you but we are out of time. So I will invite you back if you would be kind enough to join us in the future to give us an update on the markets, and how things are going. We had a number of questions come in like how do you handle your partner Goldman Sachs and you have two young kids, and you're just a young woman yourself. And so a role model for the financial industry, thank you for being there for all of us women who have troubles those ways. 

All I'll say is that I'm not that young but thank you. 

Oh, yes you are. And it's been an absolute delight having you. I've just learned so much and I'm sure my audience has as well. So again, let me thank you. Again, welcome you back any time. 

My pleasure, thank you. 

Let our audience know of three upcoming events we're going to have, the webinars upcoming. 

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Slide, Wednesdays with Woodward Webinar Series, a list of three webinars. Text, Register: travelers institute dot org 

(SPEECH) 
Actually, one right on ESG on June 30th that we're going to talk to the former SEC Commissioner Paul Atkins and Travelers own Chief Sustainability Officer Yafit Cohn about the linkage with ESG and the company's long term success, don't miss that one, and then innovation. On July 14th, I'm going to interview Travelers’ Chief Innovation Officer Kevin Smith along with Beth Maerz and Alchemy Crew's Sabine VanderLinden. 

They want to know, Can you innovate like a unicorn? We're going to answer that question for you. And especially in your insurance agencies, the mom and pop and the brokers and agents out there, you may be looked at by private equity, you maybe own private equity. Everyone wants you to innovate and we want to help you innovate in a way that makes sense for your business. So join us there. And then July 28t, the ever famous Robert Hartwig. Dr. Robert Hartwig, who was the President of the Triple I for many years. And now at this University of South Carolina, he's going to talk about emerging trends to watch for our insurance industry, and don't miss him he's fantastic as well. 

Listen, thanks for being with us. Thanks for staying with us during the hour. Connect with me on LinkedIn or email us at travelersinstitute.org to get anything you might need. We also look for suggestions for other speakers and other topics. So thanks again for joining us folks. Get your vaccine we'd love to see you all in person later this summer and this fall. I know I'm looking forward to a number of conferences I'll be speaking at. And so, please go and get your vaccine so we can all be safe and healthy. Thank you all, take care. 

Thank you. 

Bye, Amanda. 

Thanks for having me. 

Absolutely.