Why Public Companies Should Choose Texas

I moved to Austin about a year ago, after having worked in some of the world’s largest financial hubs for much of my legal career. Putting aside the many non-economic benefits of Texas (for example, Chicago winters are something I will never regret putting behind me), one of the key considerations for choosing my new home was the viability and robustness of the state as a capital market. When weighing all the factors—tax burden, talent pool, regulatory environment, state-of-the-art infrastructure, and even civic ethos—Texas is likely the best state in the country for a company to go public, and continue to operate as a public company. Let me explain why.

Certainly, I am not alone in this thinking. When Lynn Martin, president of the New York Stock Exchange (NYSE) visited Dallas last month, she said that “Texas is really [the NYSE’s] home away from home” and that she expects Texas to continue to be a hotbed for capital markets and initial public offering (IPO) activity. Indeed, the numbers agree with Ms. Martin: More than 200 of the approximately 2,400 companies listed on the NYSE are headquartered in Texas, and a similar number listed on The Nasdaq Stock Market, LLC (Nasdaq) are also headquartered in Texas. By my count, in my new hometown of Austin alone, there are almost 50 Nasdaq-listed companies and almost 30 NYSE-listed companies headquartered in the city. Larger cities such as Dallas and Houston have even higher numbers of such companies headquartered in their confines.