May 13, 2025
Two of Europe’s major stock exchange operators, Deutsche Boerse and Euronext, are enhancing their strategies to retain local initial public offerings (IPOs) in the face of U.S. competition, as reported by Yahoo Finance. The European and UK markets have experienced a significant drought of IPOs over the past two years, with numerous local firms opting for the deeper capital pools and potentially higher valuations offered by U.S. exchanges.
Deutsche Boerse, which operates the Frankfurt Stock Exchange, has highlighted the drawbacks of listing in the U.S., citing sluggish post-IPO performance and higher costs. Their findings indicate that about two-thirds of companies listing in Europe see positive first-day trading results, compared to only half of those that list in the U.S. Over time, European IPOs also tend to perform better in their home markets.
Euronext, managing seven markets including those in Amsterdam and Paris, plans to release similar findings. Both exchanges are countering the belief that U.S.-listed firms attract higher valuations than their European counterparts. This echoes efforts by the London Stock Exchange, which has also challenged the perception of superior U.S. valuations.
European officials are exploring ways to deepen the continent’s capital markets, as the U.S. S&P500 index boasts a market capitalization nearly four times that of Europe’s Stoxx 600. According to IndexBox, approximately 130 European companies, valued at a combined $667 billion, have moved their listings to the U.S. in the past decade. However, 70% of these are trading below their listing price, with an average decline of 9%.
Deutsche Boerse also noted that U.S.-listed German companies have seen a 13% average decline since 2004, while those listed in Frankfurt have experienced a 24% increase. Despite these statistics, some market experts remain skeptical, pointing out that U.S. markets continue to demonstrate relative strength compared to their European counterparts.