After 30 years of trading on Nasdaq, Teva Pharmaceutical Industries is thinking of moving to the New York Stock Exchange. The move is probably the brainchild of Teva chairman Phillip Frost, who is associated with the NYSE and has reportedly been pitching the idea to incoming CEO Jeremy Levin, say industry insiders.
In April 2005 Frost was named vice-chairman of the AMEX exchange, which the NYSE acquired in 2008. He has controlling interests in a number of NYSE-listed companies, including Ivax Corp (which Teva acquired ), biomed company Prolor, financial services company Ladenberg, alcoholic beverages maker Castle, and the pharma company Opko.
From time to time the NYSE management has tried to cajole Teva into making the move, on the grounds that it's the trading arena for most big pharma companies.
Traditionally the NYSE has positioned itself as the more prestigious exchange of the two, with the weightier companies: 10 of the 12 companies with the biggest market caps are listed there. Nasdaq meanwhile positioned itself as the younger, kickier exchange featuring cutting-edge companies.
The truth is that the distinctions between the two exchanges have been blurring. In both, 90% of trading is electronic; and the biggest company in the world by market cap, Apple, is listed on Nasdaq.
Also, pharma companies are leaning less toward NYSE: The fact is that Mylan, Teva's chief rival in the U.S. generic market, went the other way, moving from the NYSE to Nasdaq.
Leaving prestige out of it, the considerations the board will study when deciding will be Teva's multiples relative to other pharma companies on the NYSE and Nasdaq; and the volatility and liquidity of shares on the two exchanges. At this point, reportedly, the Teva management has failed to find any significant distinction between the two exchanges from these perspectives.
There is also an issue of cost: A listing on Nasdaq costs $50,000 a year. A listing on the NYSE costs $500,000 a year. Both sums are minor to a company like Teva, which on February 15 reported 2011 revenues of $18.3 billion, but still.
Teva declined to comment for this article.
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