Singapore firms’ love affair with Nasdaq continues despite post-IPO heartaches

Singapore-based companies continue to flock to the Nasdaq exchange in the US, even though data shows it is tough for smaller players to win investors there.

Two tech-enabled startups from Singapore recently made surprising moves to list on the Nasdaq: property platform Ohmyhome and facilities management platform Simpple.

These IPOs raised less than US$20 million combined, and neither have performed well since listing.

Ohmyhome’s share price has fallen some 27.8% from US$4 at IPO to US$2.89 as of Monday (October 9). Simpple is down 2.5%.

Photo credit: Grab

Those declines pale in comparison to the 87.8% fall in the value of JE Cleantech, a cleaning and dishwashing specialist, and the 71.1% fall in the value of on-demand mobility platform Grab.

In spite of this loss in shareholder value, another company is set to join the list of Nasdaq-listed Singapore names. Financial comparison platform MoneyHero will complete a business combination with Bridgetown Holdings on Friday at an enterprise value of US$342 million.

Chan Yew Kiang, IPO practice partner at consultancy firm Ernst and Young (EY), said many companies view a US listing as a “holy grail” because of the market’s association with Big Tech companies.

Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla are all Nasdaq companies.

The US bourse also has lower barriers to entry, including tiered financial and liquidity requirements. In particular, it is not necessary for a company to be profitable before listing.

Profitability not necessary

The Singapore Exchange has a similar arrangement for its sponsor-based Catalist board: companies do not need to show a profit, and sponsors determine whether a company is suitable to list. The problem is that sponsors are not as comfortable with negative cash flow companies, said Chan.

Nasdaq offers issuers three tiers: Nasdaq Capital Market, Nasdaq Global Market, and Nasdaq Global Select Market. Companies with a large market value of over US$10 billion can enter the Nasdaq Global Select market, which has about 1,200 companies – including Grab.

Companies with a smaller market value of between US$2 billion and US$10 billion make up the mid-tier Nasdaq Global Market. The smallest companies, worth below US$2 billion, fall under the lowest tier, the Nasdaq Capital Market, where Ohmyhome and Simpple are listed.

“Nasdaq is less prescriptive. No one is judging the merits of your listing, they are just judging if you have adequately disclosed the issues,” said Thomas Tarala, partner at law firm Baker McKenzie.