A Conversation with Jonathan Dickson
This month, we examine the IPO outlook for 2024, influenced by recent offerings like Reddit and Truth Social with OTC Markets Co-Head of EMEA, Jonathan Dickson. Amid greater market optimism, we discuss the importance of responsible IPO pricing and realistic founder expectations to curb short-term volatility.
What will the IPO landscape look like in 2024, given Reddit & Truth Social’s performance? I certainly think there is a greater degree of optimism in the markets than there has been for the last 18 months and we will continue to see IPOs while the markets are buoyant. Having said this, I think there should be an element of responsibility from investment bankers on the pricing of an IPO and a degree of realism from founders to avoid some of the short term volatility that is no good for anybody’s hairline.
What lessons can small- and mid-cap companies learn from these recent IPOs? A string of IPOs can be a bellwether of general investor sentiment outside of new listings and a ‘rising tide lifts all boats’ environment is usually positive irrespective of market capitalisation, at least in the short term. Outside of the market cap, the sector for which the company trades in is a key component in the cycle. An example of this being how small and micro-cap resource issuers that have had a tough couple of years, this now looks to be turning.
How does the 2024 "two interest cut" consensus impact companies currently listed on OTC Markets? The majority of the issuers that trade on our market have their primary listing outside of the US and utilise the OTCQB or OTCQX markets to access investors in the United States. This is why we use the term ‘list local, trade global’. The OTC Market therefore becomes the secondary market as opposed to the market where issuers raise money (though, some still do), so albeit important on a macro scale and the companies will feel the effects of rate changes, it has less of an impact. I say this the day after the latest US inflation data report, so I think the consensus may be in question now.
Are there particular questions you believe executives should ask themselves before deciding to be listed on the OTC? I would always suggest having an IR strategy before joining OTCQB or OTCQX. In order to maximize access to US retail, HNW, family offices and 3rd or 4th tier institutions, a USD quote is a crucial part of the puzzle. These investors are dotted all over the US, so having knowledge and support from the outset is often the key to the success.
What’s on your nightstand? The Boys in the Boat, a great story of triumph in adversity.
