Bob Greifeld: Navigating Nasdaq’s Future

The resulting massive cultural change in the company is taking place against a backdrop of industry disruption, as technological advances and globalization transform the way capital markets function. Meanwhile, startups, unburdened with legacy technology, are edging into your turf.

“Early on, we went through the ‘Are we going to make it?’ phase,” recalls Bob Greifeld, CEO of Nasdaq OMX Group. “During my first six months, we were burning money every day and didn’t have much of a balance sheet. We had to figure out where we were going.” The road he chose involved aggressive global expansion and growth, as well as a move toward becoming a provider of technology and corporate solutions. Nasdaq’s 2007 merger with Scandinavian exchange group OMX AB was a huge step, coupling Nasdaq’s electronic trading platform with the Stockholm-based stock market’s global technology services business and customer base.

From technological glitches to failed merger attempts, Greifeld has faced plenty of potholes and detours along the road to growth, most notably a trading delay during Facebook’s 2010 initial public offering (IPO) and a brief but momentous mid-day market shutdown in 2013. Those snafus were said to have cost Nasdaq high-profile listings. Despite its reputation as the market of choice for technology company IPOs, Twitter and Alibaba subsequently opted to list on the NYSE. A further reputational blow came in 2011, when efforts to take over rival New York Stock Exchange in 2011 were thwarted by regulators. The nation’s hallmark exchange has since been gobbled up by industry upstart Intercontinental Exchange (ICE).

Despite these hiccups, under Greifeld’s tenure, Nasdaq ultimately went from running one U.S.-based equity market to owning and operating 26 global markets for trading stocks, bonds, derivatives and commodities. In addition to steering the OMX deal, he led the acquisitions of the Philadelphia Stock Exchange, the Boston Stock Exchange and Europe’s Nord Pool, among others. Nasdaq now supports more than 80 exchanges, which rely on its technology to operate local markets; and it has developed a robust corporate-solutions arm, which focuses on helping private companies navigate the IPO process and transition to life as a public company.

“We have the ability to interact with our listed companies in a multitude of ways to help them with the difficult transition of becoming public companies,” says Greifeld, who notes that the corporate-solutions business and market-technology exchanges currently bring in $550 million and are continuing to grow. “Our corporate-solutions business has products and services to make sure to assist with every piece of activity you have to undertake as a public company.”

Having suffered through a post-financial-downturn dearth of IPO activity, Nasdaq is also now enjoying the fruits of an IPO renaissance. In 2008, the total number of new listings fell to an abysmal 58, of which Nasdaq only netted 25. However, IPO activity has been on an upswing in recent years, with 243 companies going public in 2013, 126 of those on Nasdaq.

Today, Nasdaq’s stock price is $42.89, significantly up from its 2003 price of $8.10, and Greifeld is optimistic about Nasdaq’s future. “We’re No. 1 and No. 2 in the space we compete in for 90 percent of our revenue, so we’re in a position of strength,” he says. “We have a pretty clear strategic direction in each of our businesses, so at the end of the day, it comes down to making sure that we execute well.”

Jennifer Pellet: As editor-at-large at Chief Executive magazine, Jennifer Pellet writes feature stories and CEO roundtable coverage and also edits various sections of the publication.
Related Post