A Message From Our CEO

As you contemplate the journey from private to public enterprise, the challenges ahead might seem daunting. The goal of this guide is to demystify the initial public offering (IPO) process. We are grateful to our partners on the project, including our publisher and expert contributors who worked tirelessly on this publication. Collectively, we hope to help you understand and navigate a complex process that will ultimately lead to a positive and successful IPO experience.

Crucial to that success is the decision of where to list. Choosing your market is a long-term decision. Your market will be a partner throughout your journey as a public company well into the future. By accessing the US public equity market via your IPO, you will stimulate job creation and innovation while tapping an attractive financing option to fuel your company’s growth. You will also create exciting new investment opportunities for individuals and institutions, with whom you will need to be transparent through good times and bad.

NYSE Euronext has grown to become a leading marketplace for entrepreneurial companies of all sizes and sectors. It may surprise some to learn that 40% of NYSE- listed companies are small cap (market capitalization below $1 billion). The adoption of a new NYSE listing

standard in late 2008 enabled growth-stage, venture-backed companies to list directly on the “Big Board,” and the acquisition of the American Stock Exchange – re- branded NYSE Amex and now running on the same technology platform with the same high-tech, high-touch model – expanded our US listing venue options to companies of all sizes and maturity.

In addition, NYSE continues to show leadership in listing growth-stage companies, especially portfolio companies of leading venture-capital and private- equity firms. Since 2007, nearly 58% of the technology companies that qualified to list on the NYSE chose to do so, raising $7.7 billion in IPO proceeds. Early in 2010 NYSE listed some of the most important technology companies undertaking IPOs, such as Sensata Technologies, MaxLinear and Calix. This is in addition to many of the most visible tech IPOs of 2009, including Rosetta Stone, SolarWinds and DigitalGlobe. Meanwhile, as an applied technology company, NYSE’s ongoing market transformation continues to more closely align it with the technology sector as a customer, a developer and a commercial market technology supplier.

For example, the March 24, 2010 IPO of MaxLinear, a provider of radio- frequency and mixed-signal semiconductor solutions for broadband communication applications, priced above its range and soared 34% on its first day of trading. “The tools and support the NYSE provided as we headed into the IPO, and post offering, have proven to be incredibly valuable for us,” said co-founder Kishore Seendripu, who is also MaxLinear’s chairman, president and chief executive officer. “Our IPO would not have been the same without the splendor and pageantry that goes with being listed on the NYSE, the grandest and most historically rich bourse in the world.”

Meanwhile, the 2009 IPO of DigitalGlobe, a leading earth imaging and information company, raised $280 million in gross proceeds. The stock rose 13% on its first day of trading. Chief Financial Officer (CFO) Yancey Spruill named several reasons for choosing the NYSE: “Brand, reputation and higher listing standards that are a good filter for company quality.” Now that the company is listed, he says that “the association with the NYSE brand is a strong positive with our customers and other stakeholders.” Spruill’s advice to those contemplating an IPO? “Get out ahead of the work flow early; for a CFO, this is an additional full-time job, and there is a lot to do.”

Beyond technology, the NYSE is experiencing an uptick in non-US IPOs. Investor appetite for the 2009 IPO of Banco Santander (Brasil) SA showed confidence in the IPO market and Brazil. The offering, which raised more than $8 billion and listed simultaneously in Brazil and the United States, was the largest IPO ever conducted by a Brazilian company and the largest in the world since March 2008.

Another Brazilian IPO was that of Gafisa SA, a homebuilding and real estate company that went public in 2007. CFO Alceu Duilio Calciolari notes the advantages of going public: “The financial benefit in the form of raising capital is the most distinct advantage. In the case of Gafisa, the capital was used to develop the company mainly through accelerated organic growth and M&A opportunities. Another advantage is an increased public awareness because IPOs often generate publicity by making our products known to a new group of potential customers.” Listing on the NYSE, he says, also provided “better access to the financial market and higher liquidity with lower volatility, making it possible for shareholders to take larger positions in our stock.”

Companies from other emerging markets are also finding their way to the NYSE. The IPO of Longtop Financial Technologies Ltd, a leading software developer and IT services provider targeting the financial services industry in China, raised $182.6 million in October 2007. “We were delighted to join the NYSE and gain access not only to US investors, but to the superior services, market quality and brand visibility that come with listing on NYSE Euronext markets,” said Chairman Xiaogong Jia. “As an NYSE- listed company, we strengthened our ability to develop our business both inside and outside China.”

Prospective listing applicants can avail of a free, confidential review process to determine their eligibility and what additional conditions, if any, might have to be satisfied. A company that qualifies for listing can normally expect its shares to be admitted to trading within four to six weeks of filing its original listing application. And should the going subsequently get tough, NYSE Euronext can assist further with professional advice from its client-service teams and extensive network of professionals. It also provides support as an advocate on public policy and regulatory issues affecting all market participants. For example, NYSE is working hard in Washington, DC to represent listed companies on issues including corporate governance, regulatory reform, global competitiveness and tax policies.

I am excited about what the future holds – the creativity and entrepreneurial spirit that will drive the capital-raising process and help deliver untapped opportunities for issuers and investors worldwide. We look forward to working with you through your IPO journey and wish you success in obtaining this significant corporate milestone.

Duncan Niederauer
Chief Executive Officer, NYSE Euronext