Nasdaq Announces Launch of Secondary Offering of Nasdaq Common Stock

Rhea-AI Summary

Nasdaq (NDAQ) has announced a secondary public offering of 41,604,207 shares of its common stock, currently held by Argus Seller, LP, an affiliate of Thoma Bravo-managed funds. Nasdaq itself is not selling any shares and will not receive proceeds from this offering. Additionally, Nasdaq has agreed to a Concurrent Share Repurchase of 1,200,000 shares from the Selling Stockholder, capped at $120 million, as part of its existing share repurchase program to offset employee dilution.

After the offering and repurchase, the Selling Stockholder is expected to hold 42,804,207 shares, about 7.4% of Nasdaq's outstanding shares, subject to a lock-up until May 1, 2025. Goldman Sachs & Co. is the sole book-running manager for the offering. Nasdaq has filed a registration statement with the SEC for this offering.

Positive

• Nasdaq is not selling any shares, preserving its capital structure
• Concurrent Share Repurchase of 1,200,000 shares offsets employee dilution
• Selling Stockholder's remaining shares are locked up until May 1, 2025, potentially reducing market pressure

Negative

• Large secondary offering of 41,604,207 shares may put downward pressure on stock price
• Concurrent Share Repurchase of up to $120 million reduces company's cash reserves
• Potential increase in borrowings under commercial paper program to fund share repurchase

Financial Analyst

The announcement of Nasdaq's secondary offering and concurrent share repurchase is a significant development with potential implications for investors. The offering of 41,604,207 shares by Argus Seller, LP, an affiliate of Thoma Bravo, represents a substantial block of Nasdaq's stock entering the market. This could potentially impact the stock price due to increased supply.

However, Nasdaq's decision to repurchase 1,200,000 shares (up to $120 million) as part of its existing share repurchase program is a strategic move. This action serves two purposes: it offsets potential dilution from the secondary offering and signals management's confidence in the company's value. The repurchase, funded through cash on hand and commercial paper borrowings, demonstrates Nasdaq's strong liquidity position.

Post-transaction, Argus Seller's stake will decrease to approximately 7.4% of Nasdaq's outstanding shares, with a lock-up period until May 1, 2025. This lock-up provides some stability in the medium term, preventing further large-scale selling pressure.

Investors should note that while Nasdaq isn't directly selling shares or receiving proceeds, this transaction could impact the stock's supply-demand dynamics. The market's reaction will depend on factors such as current valuation, investor appetite and broader market conditions. The involvement of Goldman Sachs as the sole book-running manager suggests a well-orchestrated offering, which could help mitigate potential negative price impacts.

Market Research Analyst

This secondary offering by Argus Seller, LP marks a significant shift in Nasdaq's ownership structure. The sale of such a large block of shares (41,604,207) could potentially increase the stock's liquidity and free float, which might attract more institutional investors who prefer stocks with higher trading volumes.

However, the market may interpret this large-scale selling by a major shareholder as a lack of confidence in Nasdaq's future prospects. To counterbalance this perception, Nasdaq's concurrent share repurchase of 1,200,000 shares sends a strong signal to the market about management's belief in the company's intrinsic value.

The timing of this offering is crucial. Investors should consider the current market conditions, Nasdaq's recent financial performance and the overall sentiment towards financial technology and exchange stocks. The success of this offering could set a precedent for future transactions and impact investor sentiment towards Nasdaq.

It's worth noting that after the transaction, Argus Seller will still hold a significant stake (7.4%) in Nasdaq, subject to a lock-up period. This continued involvement of a major private equity firm like Thoma Bravo could be seen as a vote of confidence in Nasdaq's long-term prospects, potentially mitigating some of the negative sentiment from the large share sale.

NEW YORK, July 26, 2024 (GLOBE NEWSWIRE) -- Nasdaq, Inc. (Nasdaq: NDAQ) (the “Company” or “Nasdaq”) today announced a secondary public offering of 41,604,207 shares of its common stock currently held by Argus Seller, LP (the “Selling Stockholder”), an affiliate of certain funds managed by Thoma Bravo, L.P. Nasdaq is not selling any shares of its common stock and will not receive any proceeds from the sale of the shares by the Selling Stockholder in the offering.

In addition, on July 25, 2024, Nasdaq entered into a share repurchase agreement with the Selling Stockholder conditioned on the secondary public offering, pursuant to which Nasdaq has agreed to purchase from the Selling Stockholder 1,200,000 shares of common stock, provided that the total amount of shares to be repurchased does not exceed $120 million (the “Concurrent Share Repurchase”). The Concurrent Share Repurchase is part of the Company’s existing share repurchase program and offsets employee dilution. Nasdaq intends to fund the Concurrent Share Repurchase from existing cash on hand, together with borrowings under its commercial paper program. The underwriters will not receive any compensation for the shares being repurchased by Nasdaq.

At the completion of the offering and the Concurrent Share Repurchase, the Selling Stockholder is expected to hold 42,804,207 shares, representing approximately 7.4% of Nasdaq’s outstanding shares, which remain subject to an existing contractual lock-up until May 1, 2025.  

Goldman Sachs & Co. LLC is acting as sole book-running manager for the offering.

Nasdaq has filed a registration statement (including a prospectus) with the U.S. Securities and Exchange Commission (the “SEC”) for the offering to which this communication relates. Before you invest, you should read the prospectus in the registration statement and other documents Nasdaq has filed with the SEC for more complete information about Nasdaq and the offering. You may get these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, Nasdaq, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by contacting Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing Prospectus-ny@ny.email.gs.com. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any offer or sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Nasdaq

Nasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking information that involves substantial risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied by such statements. When used in this communication, words such as “enables”, “intends”, “will”, “can”, “expected”, “enhances” and similar expressions and any other statements that are not historical facts are intended to identify forward-looking statements. Forward-looking statements in this press release include, among other things, statements about the offering, Nasdaq’s plans, objectives, expectations and intentions and the financial condition, results of operations and business of Nasdaq. Risks and uncertainties include, among other things, risks related to the ability of Nasdaq to consummate the offering, Nasdaq’s ability to implement its strategic vision, initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in Nasdaq’s reports filed on Forms 10-K, 10-Q and 8-K and in other filings Nasdaq makes with the SEC from time to time and available at www.sec.gov. These documents are also available under the Investor Relations section of the Company’s website at http://ir.nasdaq.com/investor-relations. The forward-looking statements included in this communication are made only as of the date hereof. Nasdaq disclaims any obligation to update these forward-looking statements, except as required by law.

Media Relations Contact:

Marleen Geerlof
+1.347.380.3520
Marleen.Geerlof@Nasdaq.com

Investor Relations Contact:

Ato Garrett
+1.212.401.8737
Ato.Garrett@Nasdaq.com

-NDAQF-

FAQ

How many shares of Nasdaq (NDAQ) are being offered in the secondary public offering?

The secondary public offering involves 41,604,207 shares of Nasdaq (NDAQ) common stock, currently held by Argus Seller, LP, an affiliate of certain funds managed by Thoma Bravo, L.P.

Is Nasdaq (NDAQ) selling any shares in this secondary offering?

No, Nasdaq (NDAQ) is not selling any shares of its common stock and will not receive any proceeds from the sale of the shares by the Selling Stockholder in this offering.

What is the Concurrent Share Repurchase agreement announced by Nasdaq (NDAQ)?

Nasdaq (NDAQ) has agreed to repurchase 1,200,000 shares from the Selling Stockholder, with a total repurchase amount not exceeding $120 million. This is part of Nasdaq's existing share repurchase program and aims to offset employee dilution.

When does the lock-up period for the Selling Stockholder's remaining Nasdaq (NDAQ) shares expire?

The Selling Stockholder's remaining shares of Nasdaq (NDAQ), representing approximately 7.4% of outstanding shares, are subject to a contractual lock-up until May 1, 2025.