FanDuel parent Flutter Entertainment began trading on the New York Stock Exchange Monday. But it’s not an IPO—Flutter is already traded on the London Stock Exchange and has been since 2019. That begs the question: Why list in New York?
“We believe a U.S. primary listing is the natural home for Flutter given FanDuel’s No. 1 position in the U.S., a market which we expect to contribute the largest proportion of profits in the near future,” Flutter CEO Peter Jackson said in a press release Monday.
But doesn’t explain why, exactly. After all, online brokers give everyone the ability to buy shares in London as easily as in New York. And there’s no evidence bettors care where their bookie is located: Flutter’s business home remains Dublin, where it originated in 1958 when Irish bookie Paddy Power focused on U.K. bettors to sidestep British taxes on sports wagers.
A company might choose to list in New York due to a few things—and the primary reason is the sizable U.S. stock market, according to Michael Harris, global head of capital markets for the New York Stock Exchange.
“It’s a combination of the sophistication of the U.S. investor base, the depth of liquidity—the size of our markets are just meaningfully larger—than what you tend to have overseas,” he said.
By liquidity, Harris means the dollar size of the U.S. market, how much is traded daily and the ease with which investors buy and sell large sums of shares. That, in turn, makes it easier to raise money down the line with more stock.
“If you look at the overall market cap of companies listed in the U.S. relative to companies that are listed on other exchanges and the amount of volume that trades on a daily basis, it’s much, much deeper.” To his point: The market cap of all stocks in the U.S. is $51 trillion—the U.K. is about $48 trillion less.
“You also have … the ability to get, in many cases, just a higher valuation,” added Harris. “So for the same shares that are traded investors in the U.S. may be willing to pay more to own those shares in the U.S. than they are to own those shares in the local market.”
Why an American premium? The sizeable U.S. stock market has many specialized portfolio managers—such as tech-focused or health care-focused funds—while foreign markets tend to have general funds run by managers who have to look at dozens of sectors. The presence of professional specialists means they dig much deeper into companies’ businesses and often decide it’s wise to pay up for their shares now. Perhaps to Harris’ point, Flutter’s shares on the NYSE Monday hit a multiyear high of $212, based on adjusted historical data from StockCharts.com
There are probably other reasons too: A U.S. FanDuel enthusiast can buy NYSE-listed Flutter shares commission-free through most discount brokers, such as Fidelity Investments, but Fidelity charges £9 (about $11.40) to buy the London-listed ones. Also, investors of all stripes in one country tend to be biased, and they purchase stocks of their own country. In the U.K., the plurality of stock that investors have—23%—are listed in the U.K., even though the U.K. produces just 2% of world gross domestic product (GDP), according to World Economics Research.
Investment theory says that investors would be better off buying a more international basket of stocks, but it rarely happens. In the U.S., the bias is even more pronounced: Three-quarters of stocks owned in ETFs, or $3.41 trillion, are U.S. listed. In Americans’ favor, too, is the fact the S&P 500 Index, of the largest U.S. stocks, has gained about 170% the past decade, while the U.K. FTSE 100 Index, of the 100 largest U.K. stocks, lags well behind with a 65% gain.
Lastly, if Flutter can get itself added to the S&P index one day, it would be another meaningful bump in the value of its shares, since the holdings of that index are mimicked by trillions of dollars’ worth of investment funds. To that end, with Monday’s listing on the NYSE, Flutter management also announced its intention to make the NYSE listing its primary listing. Flutter is asking its shareholders to downgrade London in a vote now set for May.
“To be in the S&P or other indices that track U.S. stocks you need to be a U.S. company,” Harris said.
For some, the move to the U.S. hasn’t happened soon enough.
“It’s bittersweet that it’s finally happening,” early FanDuel investor Paul Martino, of venture capital fund Bullpen Capital, said in a 2023 phone call. (Martino is no longer invested in Flutter.) “Part of me is frustrated as hell—it should have been done a long time ago.”
