The first electronic stock market
A NASDAQ case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 2: Growth and performance

Nasdaq 7 Diagram 1Nasdaq began operating on 8 February 1971 with 250 listed companies. On that day, the Nasdaq Composite Index® started at 100, this index tracks all companies listed on the market. In the period 1989-2000, the US economy experienced almost continuous growth. At the same time, rapid developments in information technology drove down costs for many businesses and improved their competitiveness. As a result, the Nasdaq Composite Index soared during this period and the volume of trades made through Nasdaq increased remarkably.

Today Nasdaq is a highly developed stock market with around 4,500 listed companies, of those 479 are non-US companies i.e. they are from all around the globe (as of March 2001). In recent years, 89% of all initial public offerings of shares in the US have been through Nasdaq. Nasdaq has provided a home for ‘growing’ companies to raise capital and trade. Younger, faster moving firms tend to reinvest the bulk of their profits into expanding the business rather than pay dividends. Most Nasdaq companies are committed to this dynamic philosophy. Shares in these types of firms are known as ‘growth stocks’.

In 1996, Nasdaq trading volumes were around 500 million shares per day. Since February 2000 more than two billion shares have regularly been traded on the market and on 3rd January 2001 the market hit its first 3 billion-share day (3.19 billion to be precise). In 2000, the dollar volume traded reached 20.4 trillion dollars, an 85% increase on the previous year. Nasdaq also lists more Initial Public Offerings (IPOs), and non-US companies than any other major market. In 2000, there were 398 IPO listings raising over $50 billion. In addition, 300 secondary offerings raised over $80 billion for the companies. Of these numbers one hundred non-US companies raised over $10 billion.

NASDAQ | The first electronic stock market