What is a primary listing’
Primary listing is the main stock exchange where listed stocks are bought and sold. For companies, having a prestigious primary listing, such as the new York stock exchange (NYSE) or Nasdaq, inspires confidence to share and makes investors more likely to buy its shares. In addition to its primary listing, shares may also trade on other exchanges. The company might want to do this to increase their liquidity and ability to raise capital.
Breaking down the ‘main list’
In order to be listed on more than one exchange, a practice called “dual listing” or “cross-listing”, a company must meet the requirements to be listed on the other exchange(s), such as company size and stock liquidity. For example, the cross-listing will allow a multinational Corporation to trade on the NYSE, but also on the London stock exchange (LSE). If the company constantly meets the requirements of the exchange listing, it will be excluded from exchange.
As Inventory Lists
Shares appeared on the exchange in the initial listing after the company undertakes an initial public offering (IPO). During the IPO, the value of a company and sells shares to an initial set of public shareholders. After the IPO “floats” of these shares in the hands of public shareholders, these shares can begin to be bought and sold on listed exchanges, through the secondary market.
For example, the on button. (Snap), the parent company of the popular snapchat social media app, was one of the most anticipated IPO in 2017. He decided that this list IPO on the NYSE and started trading to the public on March 2, 2017. The new York stock exchange lists more than 2,400 companies, including many components of the Industrial index Dow-Jones, with a total market capitalization in the tens of trillions of dollars.
The advantages of listing on the exchange
In addition to prestige, there are a number of advantages for the company if their shares are traded publicly on the stock exchange.
Some of them may include:
- the acquisition of other companies may include the use of capital, not just cash
- effects listed can attract the attention of influential investors, hedge funds, mutual funds, and institutional traders
- the possibility of raising funds through the issuance of additional share placements,
- increased ability to attract and better compensate employees,
- reduce the cost of obtaining capital through loans.