Texas Stock Exchange: A New Challenger to NYSE & NASDAQ? | Pivot
Kara Swisher (host), Scott Galloway (host)
In this episode of Pivot, featuring Kara Swisher and Scott Galloway, Texas Stock Exchange: A New Challenger to NYSE & NASDAQ? | Pivot explores texas Stock Exchange Targets ‘Anti-Woke’ Edge Against NYSE and NASDAQ The hosts discuss the proposed Texas Stock Exchange (TXSE), a new, fully electronic exchange backed by BlackRock and Citadel that aims to compete with the NYSE and NASDAQ. They see more competition as broadly positive, especially if it lowers fees and pressures incumbents, while criticizing the overt politicization of the exchange as a “non-woke” alternative. The conversation explores how lighter listing and disclosure requirements might attract companies—possibly led by Elon Musk—while potentially undermining perceived quality. They also debate whether stock exchanges should engage in social engineering, like board diversity mandates, or simply act as neutral trading venues.
Texas Stock Exchange Targets ‘Anti-Woke’ Edge Against NYSE and NASDAQ
The hosts discuss the proposed Texas Stock Exchange (TXSE), a new, fully electronic exchange backed by BlackRock and Citadel that aims to compete with the NYSE and NASDAQ. They see more competition as broadly positive, especially if it lowers fees and pressures incumbents, while criticizing the overt politicization of the exchange as a “non-woke” alternative. The conversation explores how lighter listing and disclosure requirements might attract companies—possibly led by Elon Musk—while potentially undermining perceived quality. They also debate whether stock exchanges should engage in social engineering, like board diversity mandates, or simply act as neutral trading venues.
Key Takeaways
Expect TXSE to compete on lower costs and lighter rules.
The hosts anticipate TXSE will market itself as more ‘business friendly’ with lower filing fees and fewer disclosure requirements, directly undercutting NYSE and NASDAQ.
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Perceived quality of listings drives higher valuations.
They note that stricter listing standards on NYSE and NASDAQ contribute to higher average P/E ratios, as investors treat admission like an elite screening process that signals company quality.
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Politicizing exchanges risks alienating both companies and investors.
Framing TXSE as the non-woke alternative may energize some constituencies but could exhaust and turn off others who just want efficient, neutral capital markets.
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Elon Musk could be a catalytic early adopter.
The hosts speculate TXSE is courting Musk to list Tesla, SpaceX, and other companies there, likely on terms that minimize transparency around financials, compensation, and other disclosures.
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Regional and political loyalty will be used as a pressure tool.
They predict Texas officials will push Texas-based companies to list on TXSE, framing it as a ‘team Texas’ or red-state-versus-blue-state choice rather than a purely financial decision.
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More exchange competition should benefit issuers through lower fees.
Even critics of the political messaging agree added competition can force NYSE and NASDAQ to reduce fees and improve services, ultimately benefiting companies and possibly investors.
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There’s an unresolved tension over exchanges setting social standards.
Requirements like NASDAQ’s female board member rule spark debate: some see it as appropriate governance leadership, others question whether exchanges should dictate board composition at all.
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Notable Quotes
“Oh, shut the fuck up, Greg Abbott.”
— Kara Swisher
“I think you need more competition. And Texas, there’s no getting around it, has done an amazing job.”
— Scott Galloway
“This is another case study... I think competition is good. It’ll bring down fees.”
— Scott Galloway
“They’ll position themselves as more business friendly and less woke.”
— Scott Galloway
“You’re just a money exchange, so just hush up and just see if you can give good services to companies.”
— Kara Swisher
Questions Answered in This Episode
How much can TXSE realistically relax disclosure and governance standards without scaring off major institutional investors?
The hosts discuss the proposed Texas Stock Exchange (TXSE), a new, fully electronic exchange backed by BlackRock and Citadel that aims to compete with the NYSE and NASDAQ. ...
Get the full analysis with uListen AI
If Elon Musk were to move Tesla or list SpaceX on TXSE, how might that reshape perceptions of both TXSE and the existing exchanges?
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Does the long-term value of a ‘higher-standards’ listing on NYSE or NASDAQ outweigh the short-term savings of listing on a more lenient exchange?
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Should stock exchanges play an active role in advancing social goals like board diversity, or remain neutral market utilities?
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To what extent will regional and political identity—rather than pure economics—drive companies’ decisions about where to list their shares?
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Transcript Preview
The New York Stock Exchange and NASDAQ may be facing some new competition from Texas. The proposed Texas Stock Exchange, which is backed by BlackRock and Citadel Securities, those guys, um, has raised approximately 100... you know who I'm talking about, $120 million from individuals and large investment firms. The exchange, known as TXSE, plans to register with the SEC later this year, begin facilitating trades next year, and launch by 2026. Uh, the TXSE, uh, just f- flips off the tongue, could be fully electronic and would allow dual listings with companies also on the New York Stock Exchange. Texas Governor Greg Abbott told CNBC the new exchange is for companies whose only agenda is capitalism. Oh, shut the fuck up, Greg Abbott. Anyway, what do you think about this? I like a new stock exchange, but they're gonna, like, say we're the not woke stock exchange or some stupid marketing thing like that.
Uh, I think it's great. Uh, I don't like the po- I don't like the politicization of everything, that now we poli- we're politicizing stock exchanges, that they'll try and position NYSE and NASDAQ as blue. The, uh, NASDAQ and NYSE do, I think, get out in front of their skis and start getting into social engineering and, uh, deciding what the composition of boards should be, um, which I'm just not sure that's their job. Um, but they are-
Yeah, I would agree.
Uh, I think you need more competition. And Texas, there's no getting around it, has done an amazing job. The economy in Texas now is larger than Russia, Canada, and Italy. It has more Fortune 500 companies now-
Mm-hmm.
... than anyone but, th- anyone but California. It's tied with New York. Uh, they, their-
Mm-hmm.
... value proposition here will be more business friendly, lower, you know, filing fees, probably less disclosure requirements. I feel like, I'm curious if you agree with this, I smell Elon Musk here. I, I would, I, I would bet he's gonna be their first customer and move all of his companies onto this exchange. And if you look at, if you look at these exchanges... Now, the flip side of having these additional standards is that the average PE of stocks trading on the London or Shanghai exchanges is 13. The average PE of companies trading on the NASDAQ or the NYSE is 26, because that additional qu- It's like, it's why people get a higher salary coming out of Princeton or NYU or Stanford, is the screening, the ability to get into these schools is so great that people assume you're better. It's the same... Or more qualified, I should say. It's the same when you manage to get listed on the NASDAQ or the NYSE. People assume that the vetting and the screening means you're a real company-
Sure.
... and you should trade at a higher multiple.
Why dual listings? Will you explain it? I didn't quite understand. If you allow dual listings, what's the difference? Why would you be on one exchange if you can dual list on both? I mean, you might as well, right?
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