The consistently higher returns of the U.S. stock market compared with its European and Asian counterparts year after year have led investors across much of the world to focus their attention on Wall Street, closely scrutinizing the performance of its indices and quarterly earnings seasons. With the S&P 500 delivering a return of over 100% in the past five years — compared with 56% for the Stoxx 600 or 12% for the Hang Seng — investors have been steadily increasing the share of U.S. stocks in their portfolios, while foreign companies, both listed and unlisted, look for ways to make the leap to the U.S. exchange.
Boosted to record highs by tech giants and companies’ interest in artificial intelligence — despite the correction in April triggered by the Trump administration tariffs — the U.S. stock market has brought IPOs back into the spotlight. Add to this investors’ abundant liquidity, and Wall Street has taken center stage.
In the first half of the year, cross-border IPO activity — that is, companies from one country choosing to go public in a different stock market — reached record levels, accounting for 14% of all offerings, according to EY data. That is the highest proportion in two decades. The main destination? The U.S. stock market, which captured 93% of cross-border IPOs, far above the 30% it represented in 2016.
EY’s report highlights a “rewriting of global capital flows” driven by Chinese and Singaporean firms in the technology and consumer sectors, taking advantage of the higher value enjoyed by companies listed in the U.S. and the broader investor base there. As a result, foreign firms now account for 62% of IPOs in the United States. Among them is Swedish fintech Klarna, which debuted on the NYSE earlier this month with a valuation of over $16 billion.
Alongside non-U.S. companies choosing to make the New York Stock Exchange their primary market, others that already trade elsewhere are also heading to Wall Street. This move, known as dual listing, has in recent years attracted European firms such as Flutter Entertainment, CRH, and Spain’s Ferrovial, and is expected to soon include British payments company Wise. They are drawn by the greater depth of the market, a larger pool of specialized funds, and the higher value that U.S. markets command over European ones. That valuation gap between European and U.S. markets now stands at 30%, according to recent data.
Among Spanish companies, Acerinox and Fluidra have both said in recent months that they are not ruling out this step. Consultancy Oliver Wyman estimates that so far this year, around 50 European companies — of different sizes and markets — have abandoned European exchanges in favor of the U.S.
That said, the higher liquidity these firms hope for does not always materialize, and their aspiration to join one of the major indices often goes unfulfilled — Ferrovial, for example, still hopes to eventually enter the Nasdaq 100. A recent report by Oliver Wyman and the Federation of European Securities Exchanges (FESE) on the liquidity of companies listed in two markets found that only 2% of notional trading volumes take place on secondary regulated markets.
Another study, published by New Financial, examines the performance of European firms that moved to the U.S. exchange, noting that 70% now trade below their IPO price and three-quarters have underperformed the European markets they left behind.
September, the month of awakening
After months of stagnation, the IPO market is starting to stir again. The tariff war unleashed by Donald Trump had frozen much of the pipeline of companies planning to list. But recent trade agreements between the U.S. and its main partners, improving economic conditions, and interest-rate cuts by both the Federal Reserve and the European Central Bank have brought some clarity to the horizon.
Between January and August, IPOs in Europe raised $5.5 billion across nearly 60 offerings, according to FactSet, including Spain’s HBX (the parent of Hotelbeds), Cirsa, and Sweden’s Asker Healthcare. With the uncertainty of the first half of the year behind them, European markets are now preparing for a wave of listings in September.
On September 19, Swiss Marketplace Group — an “eBay of Switzerland” with brands like Autoscout24 — became Europe’s largest IPO of the year, raising 903 million Swiss francs ($984 million). It will soon be followed by Sweden’s NOBA Bank and Verisure, the parent of Securitas Direct, which has announced plans for a Stockholm debut. Verisure aims to raise around €3.1 billion ($3.6 billion) in what would be Europe’s biggest IPO in three years.
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