As more European companies eye Wall Street for their debut listings, exchanges on the continent are mounting a counteroffensive.
With IPO volumes already depressed, operators like Deutsche Boerse and Euronext are pressing to change the narrative that New York guarantees better value for newly public firms, Reuters reported.
Hype Surrounding US Listing
Citing a document circulated among German firms and IPO advisers, Deutsche Boerse cautions against the hype surrounding U.S. listings. It warns of weak post-IPO performance, steeper legal costs, and greater litigation risks tied to U.S. markets.
The exchange also highlights new internal research showing that two-thirds of firms listed in Europe, including Germany, gained on their first trading day, compared to only half of European companies listed in the U.S.
The study stops short of comparing initial valuations. But Deutsche Boerse argues that several firms listed in Europe now trade at a premium to similar businesses that chose a U.S. launch.
Read more: eToro Upsizes IPO Price to $52 a Share: Aims to Raise $620M at $4.2B Valuation
IPO Landscape
Europe has seen a sharp decline in public offerings in recent years, with many firms attracted to the perceived depth of U.S. capital markets. According to LSEG data, the $49.5 trillion market capitalization of the S&P 500 dwarfs Europe’s Stoxx 600 by nearly four times. Despite this gap, European exchanges are making the case that homegrown listings can yield better long-term results.
Deutsche Börse claims that since 2004, the average share price of German firms that went public in the U.S. has fallen by 13%. Companies like trivago and Mytheresa have struggled post-listing. In contrast, issuers who were listed in Frankfurt saw average gains of 24%.
With capital formation increasingly shifting abroad, European regulators are also taking note. Reforms to listing rules are under consideration to make local markets more attractive to both companies and investors.
Exchanges, meanwhile, continue to emphasize their role as key infrastructure, crucial for regional investment and economic resilience. While Wall Street’s allure remains strong, Europe’s stock exchanges are no longer willing to accept the narrative without a challenge.
Meanwhile, after a months-long delay caused by tariff-related market volatility, eToro launched its U.S. IPO with stronger-than-expected investor interest, potentially pricing above its marketed range. Debuting on Wednesday, eToro increased the price of its IPO to $52 per share, as its shares are set to begin trading publicly on Nasdaq today (Wednesday) under the ticker “ETOR.”