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[00:00]
A
I thought I was an expert in IPOs because I oversaw, in quotes, 600 IPOs while I was at the New York Stock Exchange. I was really wrong. I was completely unprepared. The number of public companies is dwindling. The number of really great young companies that are going public has been dwindling. Continuing to raise the alarm is my best approach.
[00:18]
B
Does it make things like the New York Stock Exchange obsolete? Hi there. I'm Liz Thomas, head of investment strategy at SoFi. And this is the important part. The IPO market is a big topic of conversation in 2026 and retail investors are more involved than ever. But the landscape has changed. Companies are waiting longer to go public and you're seeing new companies in blockchain and crypto pop up in both public and private markets. So what does that mean for you as an investor? Today's guest, Tom Farley, CEO of Bullish, knows a thing or two about IPOs and how they've changed over the years. He took Bullish, one of the leading crypto exchange platforms, public last year and he was the president of the New York stock exchange from 2014 to 2018, where he oversaw multiple major listings including Alibaba, Snap and Spotify. Tom, welcome to the show.
[01:19]
A
Hi there. Thanks for having me, Liz. Very excited.
[01:21]
B
I am pumped about this. But before we get into it, nothing in this episode should be treated as a recommendation from SoFi. And this is not investment advice. Okay, let's start sort of macro. But I first learned of you when you were President of the NYSE. For those of you who don't call it the NYSE. NYSE is New York Stock Exchange that ended in 2018 and since then it seems like you've made a pretty clear pivot into what I'll call innovative finance. So there were a couple stops before Bullish, but you invested in fintech companies and then eventually made this full pivot into crypto. So let's talk about that transition with. Did you see something happening in the markets back when you were president of the NYSE or around that time that told you this is the right direction to go? I need to go full steam ahead on fintech, crypto, so on and so forth.
[02:14]
A
I'm not too creative, so I just keep running the same play in my career, which is use innovative, even seemingly avant garde technology and apply it to old concepts, old ideas, old businesses. So my first big break was going into an all floor based futures exchange where on day one I went in and was shocked to find out in the year 2008 it was all paper based. There were carbon copies crumpled up, thrown everywhere, keeping track of trade tickets. And my job as the young whippersnapper was to introduce electronic trading. And it wasn't easy because as you probably know, if you know a few of them, the floor trading crowd are very bright and they're very tough and they didn't necessarily love electronic trading. And so I learned a lot of lessons in persuasion, but was able to introduce electronic trading. And then I went in to run the New York Stock Exchange that had evolved quite a bit from its, its roots. For example, there was electronic trading, but they were operating on very old systems. They still had paper based processes, still a lot of manual processes. And, and my job was to go in again to introduce avant, more avant garde electronic trading technology, more dependable from the customer's perspective, more reliable and bring efficiencies down into the New York Stock Exchange organization. Fast forward. Today we've announced we're buying a business called Equinity. Now what a quinity is, is the transfer agent for one of, one of two main transfer agents for the global equity markets, essentially, which means they keep track of who owns what for your SOFI customers, who owns what share of, of which stock. Again, sort of a old school business still has a lot of, not manual processes, but cumbersome processes. And without kind of an avant garde technology to bring it into the 21st century. In this, this case, we're not just bringing electronic trading, which of course we are, but that's kind of the standard now. We're also bringing blockchain technology. So this is kind of the third iteration of this strategy. If I can just answer all parts of your question and you allow me to monologue for a moment more my interest in blockchain. I came honestly, my neighbor was walking across my lawn and I said, hey Danny, are you going back to Duke? And he said, no, I've graduated. I'm going to start a blockchain company. And this is 2013, I know I'm going in as the President CEO of the new York Stock Exchange. And he proceeds to tell me about this blockchain thing that I had no idea about and how it's going to early. Yeah, it was very early. And how it's going to disintermediate places like the New York Stock Exchange. And so I convinced him and his roommate to let the New York stock exchange put $10 million into that business, which was Coinbase. And so that's how I got into blockchain and negotiated board observer rights for Myself, so I could learn this industry on behalf of the New York Stock Exchange. And I always wanted to get back into it. And so once I had the opportunity, I jumped at it. My wife observed this weekend, like, you just seem so excited about work, and I am.
[05:20]
B
That's a great place to be. And I'm sure you know, crypto winters don't help when prices are down and it's a tough time to be in it. But if you really believe in the underlying technology, you really believe in the path of that, that innovation, it's a lot easier to sit through. And especially if you've made a career of it, then it's like, I'm not just on this train for a few minutes, right? I'm. I'm here for a long time, not a good time. And I think those winters are the times when it really tests people's patience, but it also tests your conviction in all of it. And it's. It's fascinating to watch, I guess. I wouldn't say I'm on the sidelines, but I didn't devote my career to it, so it's interesting to watch. And I didn't know that you were in it before or even at the beginning of the New York Stock Exchange. So this wasn't a big pivot for you. This was like going on behind the scenes. And then you finally went all in when. 2021.
[06:12]
A
Yeah, 2020. Going back in time to that Coinbase investment memorandum was blockchain was this new layer of programmable finance that would be more transparent to the users, your customers, to issuer clients like public companies, to investors like Fidelity Wellington. But it would also be auditable. It would be always on 24 by 7. And it basically would just lower the friction and lower the cost of this beautiful free enterprise system of which we are all a part. And that's why we did the investment. And that was in the investment memorandum. It was completely wrong. That did not come to pass for a decade. Meaning what the digital asset space was about from 2013 to 2023 was, by and large, the trading of crypto assets, as opposed. And by, by and large, retail and a very particular group of crypto native hedge funds or institutions or trading firms. And so the crypto winters that you referred to, usually people are talking about with respect to price movements up and down. For me, the thing I've always tracked is the institutional involvement. And it's been a long winter. Yeah, it's been one long continuous winter.
[07:32]
B
It's spring now, isn't it?
[07:34]
A
It's Spring. Now it's more than spring. So we at our consensus conference that, that we put on in Miami, we were down there and JP Morgan has, has a big booth. I spent time with Franklin Arc had a big presence, you know, banks and equity participants. I saw the New York Stock Exchange, I spent time with the Nasdaq, I spent time with DTCC. You never would have seen this even two years ago, let alone five years ago or 10 years ago. And so the institutions are coming. And the reason why that's so important to me personally is it's validating what I've long thought, but it's been delayed gratification, which is blockchain can in fact rewrite our financial markets as they exist today in a really, in a really exciting way. And I think that's what's going to happen. And I actually have become a full on cheerleader in the sense that I think it's going to happen a lot, a lot faster than 95% of market watchers believe it will.
[08:32]
B
The fear is that it would make financial markets as we know them obsolete. Somebody told me this is at least five years ago now that blockchain and crypto is going to make the New York Stock Exchange not exist anymore. And that I think people hear that and it's too disruptive to think about. But the question I want to go to first is what brought the institutions in? What was the moment? Because nobody wanted to be first, right? Nobody wanted to be the first one that said, you know what? Yes, let's start to invest a bunch in that. Once you got that first one, two, three in, then everybody started to do it. But what caused it?
[09:10]
A
The new administration is just bringing in an administration that was more friendly to this type of innovation and made it really clear on the very first day hey, we're not coming after you to sue you unless we, we see some fraud or, or, or, or malfeasance. And then the second thing, which is a cousin of that but, but distinct is completed laws and regulations passed emanating from those laws in major western and western style economies. So think the European regulation for crypto called mica, the Hong Kong regulation that the SFC passed and, and then most importantly the Genius act which was a bill passed by our Congress, both houses signed into law which really validated stablecoins, which is something I know is very important to Sofi and Sofi has some really great ideas on. And so all of that put together, if you're Ted Pick or you're Ken Griffin, you say okay, now's the time. Yeah. Now's the time to do it. And it's really, it's really nothing other than that.
[10:06]
B
Yeah.
[10:07]
A
And that's what we see all around the world. I mean our, our incremental customer, our marginal customer now has the, has the name bank or investments, know, insurance or something like that in its title.
[10:16]
B
Right. So if you think it's spring in the institutional adoption, we're still early in that and many more are going to jump on this train or the, the institutions that are already in on it start to go in much bigger. How does this grow over the next few years?
[10:32]
A
Well, let's define what, what we're talking about. The, the way I think of it, which is probably distinct from how most people think of it, but it's, it's a framework is you have crypto assets. So think Bitcoin, Ethereum, Solana and many others that are known to your listeners. So you have the crypto assets. Then you have stablecoins, which are really just so called tokenization of the dollar. And when I say tokenization, I'm referring to the representation of an actual asset in the form of a token on a, typically a public blockchain. Okay. That is the US Dollar being tokenized. And it's been a massive success. Gone from 0 to I think 325 billion of market cap. I read over the weekend that Visa put out a study. They, they think there was $12 trillion of payments. So stablecoins exchanged in the, in the last 12 months.
[11:31]
B
Supposed to be one to one to the dollar.
[11:34]
A
That's supposed to be one to one of the dollar. And what the genius act did is kind of codified that that short of fraud or other malfeasance, it's not only one to one, it's one plus a little, a little margin. And in fact all the reserves have to be held in dollars or something that looks a lot like dollars, like very short term liquid investments.
[11:51]
B
Got it.
[11:52]
A
And then the third, which is the one I'm the most excited about, we're in the earliest innings, you know, to use the baseball metaphor, we're in the top of the first inning and the first batter is just fouled off a couple pitches. And that is the tokenization of the $270 trillion global securities market. And that's where I'm the most excited. You're going to see the ability to trade stocks in the form of tokens. And I'm not talking about trading a token. That's a contract to someday own the stock or trading A token that sort of duplicates the return of the stock. I'm talking about the token is the stock, it is the ownership in the company. You can get dividends, you can vot, you can do everything with that security and many, many more things than you can with an old school certificated share. And that's just stocks. Then of course there's fixed income bonds and the like.
[12:48]
B
So that's how I was under the impression, tokenized security. They're two separate instruments that you've got a stock that underlying that trades on the exchange from 9:30 to 4:00pm Eastern Time and then you've got the token of that stock, let's say Apple, right? You've got Apple stock that trades normal, normal trading hours and then you've got a token of Apple stock that trades 24. But they're separate instruments and there could be a spread between the two. Am I wrong?
[13:13]
A
So no, that absolutely could be the case. Will we continue to see trading of certificated shares? Absolutely. No. No question. I'm struggling to understand. Once we as an industry have solved the regulatory hurdles and we've plumbed tokens into things like the market trading rules that exist in this country, I'm struggling to understand why we would still need to trade these old school certificated shares. Because the token will just be better. You'll have 24 by 7 access, you'll have way more visibility, you'll have way more maneuverability of the token. It's very, very difficult to move your shares around. Try calling your broker and asking them to move it to another broker or God forbid, try calling a transfer agent and transfer it to another transfer agent or another broker. Whereas with tokens you don't have any of that. So I tend to think that we will see a day relatively soon, meaning in the next decade, not in the next 10 days or where it just kind of all moves to tokenized trading because it's a, because it's a better mousetrap.
[14:13]
B
So, so does it make things like the New York Stock Exchange obsolete?
[14:17]
A
Well again, go back to, you know, I'm not a visionary and I just go back to pattern recognition. You know, when you had the introduction of electronic trading, it first of all was an explosion of innovation. They were very, these were very fun times and it was similar to this, just a better mousetrap. And certainly you saw companies just disappear, they just stop existing. But the, the far more common case for great businesses like the NASDAQ and their market position and NYC and their market position, the far more common case is they develop or acquire the technological capability. So I think there's going to be a lot of consolidation. There's going to be a lot of investments in technology. You're already seeing it. All the old traditional finance exchanges and plumbing businesses have put out announcements about. Here's how we're doing. Token. The. The game of chess has begun. And I don't know how it's going to play out, but it's not like the New York Stock Exchange is going to disappear. Absolutely not.
[15:11]
B
Okay, let's talk about IPOs. You took bullish public in August of 2025. So that was after, obviously, you spent time at the nyse. What did you learn about the IPO process that you didn't yet know?
[15:28]
A
The IPO process needs an upgrade.
[15:31]
B
I was gonna say it's real smooth, right? It's real easy.
[15:35]
A
I thought I was an expert in IPOs, because I oversaw, in quotes, 600 IPOs while I was at the New York Stock Exchange. And, you know, we performed this coordination role or this orchestration role, and I thought, geez, I've. I've seen it all. I was really wrong. I was completely unprepared. Going through the process myself as the listed company chairman and CEO, I saw a completely different perspective. And the things that I saw made me even more confident in the business that Bullish is becoming. In other words, using blockchain technology to bring this layer of transparent programmable finance, equitable programmable finance, to the US equities markets. When we were going around and we would have these meetings, we would get feedback and the feedback would be okay. Yeah, we talked to Jen. She wasn't in the meeting, but she talked to Carl. And Carl had some positive feedback. And we think he's gonna be good for maybe up to 38 a share. But we won't know until the night of the pricing, and then we'll get a feel for it. And I'm just looking around like, is this a joke? How is this not more transparent? How is there not a market clearing mechanism here that everybody can participate in? And what I saw was we became a very hot IPO. And IPOs tend to be binary. They become very hot or they become difficult to get over the line. And for a bunch of reasons unrelated to our business, actually, we became a hot ipo. Yes, we had a good business. It's not false humility. I'm proud of what we've built, but it happened to be a really, really great time. Well, all of a sudden, the allocations to retail started going down. Oh, well, you got to have this institutional investor in, and you got to have that institutional investor. And we said, well, wait a minute. Why were we giving retail more, you know, a week ago when we didn't know if this was a hot ipo? So I didn't love that part of it either.
[17:30]
B
I think gets the tail end.
[17:32]
A
Yeah. Yeah, we need to. We need to figure out how to make it more equitable. I saw some other issues, too, where some of the electronic brokerage platforms that service retail didn't give the ability for retail to have limit orders on their. On their IPOs. So, you know, our IPO traded up to $122 a share, and that's somebody's mother who was buying $122, or somebody's brother who's buying $122, which was not a reasonable market price in my estimation at that moment in time for Bullish. So there's just a lot that I think needs to be fixed. And I know I sound like I'm a hammer and everything looks like a nail, but that's part of what blockchain technology does. It's all out there in the open. You can see everything that's happening, and there's. Sunlight is the best disinfectant. And providing transparency will help us improve this. This model all around.
[18:24]
B
Well, and you can see everything that happens. And I think, too, the. The volatility that's inherent in IPOs, right? Something goes public, there's a price that it goes public at. And Bullish was one of these. But this happened to a bunch of stocks right around that same time. They fly up, you know, three times what they went public and then crater a week later. And. And that volatility, especially as retail investors, if they haven't done it before, because now retail investors can be more involved. They experience that, and it's. It's a bad experience. It's like, well, I got burned. Now I don't want another ipo, right? And understanding that that's part of. Part of the game, sort of of having an ipo, and that's why you buy it early and you wait for it to do what it's supposed to do. But I wonder if in this future world that you're talking about, if all of the blockchain technology makes it more transparent, then does the volatility of something like IPOs die down, too?
[19:22]
A
I want to add one thing related to this on onto my last answer. We. We did something I'm very proud of. We actually. And this Was not easy. I won't be too specific, but there were a lot of entrenched interest against what I'm, what I'm about to describe because we were a hot IPO. And I knew it, frankly, because we had 51, 52 one on one meetings and we got 51 orders.
[19:48]
B
Oh, wow.
[19:48]
A
We were oversubscribed. I don't remember the exact numbers, but literally 20 times or more. So we, we were going out to raise 1.4 billion. We had 30, don't hold me the exact number. 30 billion of demand. Yeah, we increase the retail allocation at the IPO price. So in other words, we gave more shares to retail than any other IPO I've ever seen, with the exception of when Robinhood themselves went, went public. And so that's great. I feel really good about that because we, we allocated those shares or whatever the IPO price was. I think it was 37, it may have been 34. And then the stock traded, like I said, up to 122. Even when it settled, it settled at 80 or what have you. So those gains went disproportionately to retail,
[20:34]
B
which you allocated 30% right.
[20:36]
A
To retail. I think we allocated in the, in the final instance, I think we allocated like 21% to retail. But that's including through SoFi, which was great. SoFi moved heaven and earth to be able to provide that opportunity for its customers in a much larger size than they typically would. So I'm proud of that. I want to draw the distinction between that and somebody buying on that day at $122.
[20:59]
B
Sure, yeah, yeah, yeah. Okay. Well, talk about retail though too. I mean, there's, there's the IPO process, but just the retail trader in general. Right. They have so much more available to them by way of information, by way of interest, and just all the vehicles that they can buy. So talk about how you view the importance of the retail investor in today's markets. And does it change the market? Does it change the way the market behaves?
[21:26]
A
To answer your question directly, retail is becoming the marginal price setter and is becoming far more, has become really far more important than at any time during our lifetimes. Like when I was growing up, if my parents had a few extra shekels, which they didn't, usually they would call a broker who they went to church with and they'd say, hey, Frank, what do you think I should buy? And Frank would say, oh, there's this new, you know, Ford is coming out with a new car. I really think you should Go into Ford and then they would put some money with, with Frank at Smith Barney or what have you. And what's happened over the last 30 years is retail wants more control. They want more discretion, they want more power in their fingertips. They want to be the one actually pressing the button. They've realized because of people like Warren Buffett, frankly, or Vanguard blanking on the amazing founder of Vanguard's name, have kind of taught a whole generation that just trusting someone to say go buy Ford probably isn't a great idea. You should probably construct a portfolio. You should be focused on cost, you should have eyes on your money. So it's a whole new model where you have to appeal to retail, for example, as a public stock bullish. Because if you're not, you're missing the marginal price setter.
[22:42]
B
Yeah, well, and things have changed too. Not just from a retail perspective. I mentioned this in the intro of this whole episode that companies are waiting longer to ipo, and it seems like maybe it's not the thing that you aspire to anymore necessarily, because private equity is a big player now too, that's grown a ton. And there are even retail investors that can invest in private equity now. So is the, the old model that I started my career believing of you. The idea is you buy a company when it's a small cap, you watch it grow into a mid cap and then it becomes a large cap. And that is the life cycle of success. Right? And that's the investing journey that you want to be on with these companies. Is that done? Because now we've got, we've got fewer small cap companies or we've got a lot of really non profitable small cap companies and it's as if the market has sniffed that out and doesn't necessarily want them anymore. And a bunch of companies that are in the most important sectors, technology blockchain, whatever it may be, are going public at billions and billions of dollars of market cap. So is that life cycle over?
[23:55]
A
It's a great question. Chuckling Only because I remember getting that question in 2014 when I had first gone in to run the New York Stock Exchange. I spoke at an event at the Economic Club in New York and I got the same question and my answer was very strident. No, it's not over. And we're going to be able to bring these companies back at an early stage. The Airbnbs and the Ubers and the Alibabas and the Snaps, we can get them to go public sooner. And that's ultimately a great thing if you care about wealth inequality because that way it's easier for the pensions and the every man and every woman to be able to invest in the extreme price appreciation of these companies. And here we are 13 years later and SpaceX is contemplating going public at over a trillion dollars. So it absolutely, positively has been a dream deferred at a minimum. There's been really no positive progress. Sarbanes Oxley makes it super duper expensive to be a public company and complex. I'm seeing it firsthand. There's more and more regulations that continue to be passed and promulgated. We just had one recently that as a foreign private issuer, I have some new restriction on me that just popped up. Well, this just got passed. This was a rule that's been in the works for two years. And I'm thinking, holy smokes, this is the most progressive sort of free market SEC that we've had in my entire career. And there's still regulations that are coming in that make it difficult to be a public company. So I'm optimistic it will change at some point in time. We're going to continue to need to have brave leaders and I would put Chairman Atkins in that bucket. Truly, as somebody who wants to fix it, wants to lower the costs of being a public company, wants to lower the legal risk and all the ankle biter lawsuits that you get as a, as a public company. But we are nowhere in that regard right now. Let's be clear. The number of public companies is dwindling. The number of really great young companies that are going public has been dwindling. So continuing to raise the alarm is my, is my best approach.
[25:57]
B
I'm going to ask a question that is, it's not rhetorical. I want you to give your honest answer. Probably an obvious answer is your background is with public companies, but did you consider private equity instead of IPO for both?
[26:11]
A
No. And part of it, you know, I'm like Mr. IPO and Mr. Public Company. Maybe a little bit of it's just entrenched thinking I can't shake. Our plan was let's double down on being pure as a driven snow like we have. We've had Deloitte for six years. We have excess cash in our balance sheet. We sought out the toughest regulators on planet earth for our regulatory status. Other companies will say, oh, I want to go into Europe, so I'll go in through Malta or Cyprus, kind of the, you know, the JV regulators. We went in through the Germans, you know, to give, to give you a sense. And part of that doubling down was, let's go public on the US Public markets and let's hold ourselves out as a firm willing and actually seeking out that scrutiny to be able to demonstrate once this institutional wave comes, that the sofi's of the world, great companies, really well run, who are looking, in this case, you know, SoFi needs some liquidity for Bitcoin to provide their customers. They're going to look at us and they're going to go, oh, I like the cut of their jib. And so we made that decision ironclad. Not everybody agreed with it. The board had my back. In fact, the board was, was pushing for it as much as we could. And so when we saw a window last June, we called the bankers and we said, cancel your Hamptons rentals. We're going with this sucker and we're going to make it happen here in the next eight weeks. And we were able to get it done. And I haven't regretted it for even a moment. And in fact, Liz, people talk about benefits of being public. We just did the largest crypto acquisition of all time. We announced it last week and we're paying $4.2 billion for this equinity business. And it's going to be awesome to have this tokenization engine combined with the value added services that Bullish already provides. The seller was not going to sell for cash because we paid a price that was not an exciting price for them. But they would sell for stock because they believed in the vision as much as we believed in the vision. Well, guess what? We ain't doing that if we're a private company. The only reason we could pay with stock is we could point to our stock trading on the New York Stock Exchange. We could demonstrate the value, demonstrate the liquidity, and that enabled us to do this transformative transaction. So being public has been a superpower for us. It's brought us a lot more customers. It's brought us this, this public currency and it's certainly brought us respect with regulators all over the world as well. So I would encourage others. And I said the same thing to Mike Belshi at Bitco when he was contemplating an IPO and others who have, who have gone public. It's been nothing but helpful for us now getting ready for Sarbanes, Oxley audits and compliance and all that stuff. A lot of it is over ra. A lot of it is time wasted is a pain in the ass, but it's worth it.
[28:52]
B
Okay, last, last question on IPOs, is this a healthy IPO environment? And if it isn't what makes a healthy IPO environment?
[29:04]
A
I think it is a healthy IPO environment. This summer when we went public was a hot IPO environment, which you might argue isn't healthy. I mean you saw circles IPO and just ridiculous price appreciation there and then figma, which proved to be a little bit overdone and then bullish. So that's what a hot market looks like. I think the current IPO market with stock market indices near all time highs is a good one. It's definitely a selective one. So you have to have an excellent business. Sometimes when the market's so hot, people will just lob in orders because they know that the price is going to go up when the company IPOs. Now it's more selective and I think that's because there is a lot of risk in the world just with what's going on in Iran geopolitically, uncertainty about these midterms. So it's not like any old Tom, Dick and Harry with a business can take it public. But yeah, I do think it's a good environment. Right now would be my general take. Do you agree with that?
[30:09]
B
I do. The only thing that I think is maybe working against it, and maybe this is why it hasn't been hotter, is the constant concern over valuations. Everything's too expensive. So now when we take things public, you've got maybe a more discerning investor who says like I'm just gonna wait, I'm gonna wait out that volatility and I'll buy it later when it's on sale.
[30:31]
A
Yeah, that's what's happening.
[30:32]
B
So then the company itself, as it goes public, it isn't as beneficial.
[30:37]
A
Right.
[30:37]
B
Because you got to go through those ups and downs and then probably settle out somewhere below your IPO price. So. And that's difficult to model for a company. It's how do we, how do we model the capital that we're going to get out of this transaction and all the work that goes into going public and then you can't really model out what it's going to look like a year from now. So I think the valuation story is working against the IPO market a little bit.
[31:00]
A
I'm stating the obvious, but the big moments will be the SpaceX IPO should it come to pass, and I expect it will. And then OpenAI, which OpenAI is anthropic. OpenAI is talking to bankers and doing bake offs for an IPO with SpaceX. I'm hopeful there's such a cult around. Elon. I'm Hopeful it's an orderly ipo. And go back to the retail conversation. I hope it's not kind of a big blow off top sort of situation where retail is buying at the very high. I'm a little bit concerned about that and I hope that it kind of trades in line with fundamentals. But those will be two big moments and if those go well, then the floodgates will probably open and we might
[31:46]
B
know about both of those in the next six months.
[31:48]
A
Yeah.
[31:49]
B
Yeah. Okay, great. Well, thank you, Tom, for coming. Thank you for sharing all of your wisdom and all of your experience. I think this is maybe one of the better, well encompassed episodes. We talked about blockchain, crypto, IPOs, what the stock exchange used to look like, what it might look like in the future. So I think our listeners will really enjoy it. Thank you.
[32:07]
A
I enjoyed it thoroughly. You're very insightful yourself and ask great questions and I'd love to be back someday, of course.
[32:20]
B
What a fascinating episode. We talked about so many things that could shape the future of finance for years to come. A couple big takeaways. Tom was talking about blockchain being able to rewrite markets as we know them and that it's happening a lot faster than people think. So this is something to really keep in mind as investors as you watch how things evolve. And then we talked also about, we're in the early phases of this, very, very early phases, but the idea that stocks can trade as tokens at some point and what that will look like, whether there's going to be two separate instruments, what that means for exchanges going forward. I think that will also be a really interesting journey to watch as markets evolve. And then as far as the IPO environment right now, it was promising to hear him say that it's a healthy IPO environment from somebody who knows so much about IPOs and has watched so many of them happen. The idea also that retail investors want more control and power at their fingertips and retail investors are more involved in IPOs than they ever have been before. And I think it's great that retail investors can have that available to them because they're learning about what it means to become a public company. They're also learning about volatility and what it looks like in the IPO market. And I think that's really valuable experience for all retail investors to have. And then lastly, Tom talked about bringing bullish public and how it brought them a lot more customers and legitimacy. And I don't think that they're the last company that's going to have that experience, particularly in the blockchain and crypto space. So thank you very much for listening or watching, and I look forward to bringing you the next episode next week. For more from me, read my weekly column in SoFi's newsletter on the money and on the SoFi website, or follow me on X at Liz Thomas Strap Follow the Important Part Wherever you get your podcasts. The Important Part is produced by SoFi in partnership with Sony.
[34:17]
A
Podcasts investments are not FDIC insured, are not bank guaranteed, and may lose value. Elizabeth Thomas is a registered representation representative of SoFi securities and a registered investment advisor with SoFi Wealth. This podcast is brought to you by SoFi Invest, which is a trade name used by SoFi Wealth LLC and SoFi Securities LLC. This podcast is for informational purposes only. Investing involves risk.

Summary6 min read

Podcast Summary: The Important Part – “SpaceX, OpenAI and the Future of IPOs”

Host: Liz Thomas (Chief Market Strategist, SoFi)
Guest: Tom Farley (CEO, Bullish; Former President, NYSE)
Date: June 3, 2026

Overview

This episode dives deep into the changing landscape of IPOs, the accelerating role of blockchain in global finance, and the rise of retail investors. Liz Thomas sits down with Tom Farley, a long-time innovator in electronic markets and blockchain, about the evolution of public listings, institutional crypto adoption, and what the near future may hold with major IPOs like SpaceX and OpenAI looming on the horizon.

Key Discussion Points & Insights

1. Tom Farley’s Career: From Floor Trading to Blockchain

Background: Tom retraces his path from modernizing a paper-based futures exchange (2008) to leading the NYSE (2014-2018), then plunging into fintech and ultimately crypto/blockchain.
Pattern Recognition:

“I just keep running the same play in my career, which is use innovative, even seemingly avant garde technology and apply it to old concepts, old ideas, old businesses.” – Tom Farley (02:20)
Early Interest in Blockchain: NYSE’s early investment in Coinbase (2013) was Tom’s springboard into understanding blockchain’s potential to disintermediate traditional exchanges.

“I convinced [my neighbor] and his roommate to let the New York Stock Exchange put $10 million into that business, which was Coinbase.” – Tom Farley (04:34)

2. Institutional Crypto Adoption: What Changed?

Regulatory Clarity: Institutional floodgates opened as a result of supportive regulatory environments (especially post-2025), landmark global legislation (e.g., MiCA in Europe, Hong Kong SFC), and the US Genius Act which validated stablecoins.

“The new administration is just bringing in an administration that was more friendly to this type of innovation and made it really clear on the very first day, hey, we're not coming after you to sue you unless we see some fraud or malfeasance.” – Tom Farley (09:10)
Spring for Institutions: Major financial giants (JPMorgan, Franklin, Nasdaq, NYSE) were out in full force at crypto events in 2026—a novel and symbolic shift.

“The institutions are coming. And... it’s validating what I’ve long thought, but it’s been delayed gratification.” – Tom Farley (07:40)
Framework for Tokenization:
- Crypto Assets: Bitcoin, Ethereum, Solana
- Stablecoins: Dollar-backed tokens (“Gone from zero to $325 billion of market cap… $12 trillion of payments” – 11:17)
- Tokenized Securities: “Top of the first inning” for transforming global equity and bond markets (12:01)

3. Will Blockchain Make Stock Exchanges Obsolete?

Tokenization Impact:

“I’m struggling to understand… once we as an industry have solved the regulatory hurdles… why we would still need to trade these old school certificated shares. Because the token will just be better.” – Tom Farley (13:12)
Exchanges Evolve, Not Vanish: Rather than disappearing, major exchanges will consolidate, acquire blockchain capabilities, and adapt to the new infrastructure.

“You saw companies just disappear, they just stop existing. But the far more common case for great businesses like the NASDAQ and NYSE… is they develop or acquire the technological capability.” (14:16)

4. IPO Process: Pains, Fixes, and the Role of Retail

First-hand IPO Lessons: Despite overseeing 600+ NYSE IPOs, as Bullish’s CEO, Tom found the process “completely unprepared” and in dire need of transparency and efficiency upgrades.

“I thought I was an expert in IPOs… I was really wrong. I was completely unprepared.” (15:34)
Retail Investors Get Shortchanged:
- As IPO heat rises, allocation to retail is often cut—despite retail’s importance.
- Retail investors often miss out or buy into unsustainable price spikes post-IPO due to opaque allocations and poor trading tools.
“All of a sudden, the allocations to retail started going down… I didn’t love that part of it either.” (16:46)
Bullish’s Approach: Increased retail allocations (up to ~21%), with SoFi facilitating large retail orders.

“We gave more shares to retail than any other IPO I’ve ever seen, with the exception of when Robinhood themselves went public… SoFi moved heaven and earth to be able to provide that opportunity for its customers...” (19:48, 20:36)
Blockchain as Disinfectant: Blockchain transparency could fix the current IPO model’s inequities and volatility.

5. Retail Investor Ascent

Shift in Market Power:

“Retail is becoming the marginal price setter and… far more important than at any time during our lifetimes.” – Tom Farley (21:26)
Democratization of Markets: Retail now expects and demands direct control through modern trading apps, propelled by education and reduced friction.

6. The Decline of Small-Cap IPOs & Evolving Public Company Lifecycle

Delayed Listings & Wealth Inequality:
- Companies now wait much longer, going public at huge valuations (e.g., SpaceX at $1T+), curtailing earlier public access to growth.
- Onerous regulations (Sarbanes-Oxley, SEC rules) and legal risks deter early listings.
“The number of public companies is dwindling. The number of really great young companies that are going public has been dwindling. Continuing to raise the alarm is my best approach.” (25:35)

7. Public vs. Private: Why Bullish Chose IPO

Strategic Rationale: Public status brought Bullish more legitimacy, customers, and enabled major stock-based deals.

“Being public has been a superpower for us… it’s brought us a lot more customers. It’s brought us this public currency and it’s certainly brought us respect with regulators all over the world as well.” (27:58)

8. The State of the IPO Market (2026) & What’s Next

Current Climate:
- Selective but strong IPO environment, with hot streaks (e.g., Circle, Figma, Bullish).
- Ongoing valuation concerns: higher scrutiny, investors “wait out” volatility for better entry points.
“It is a healthy IPO environment… but it’s definitely a selective one. So you have to have an excellent business.” (29:04)
Big Catalysts Ahead:
- The SpaceX and OpenAI IPOs could unlock a new flood of public listings—if they go well.
“The big moments will be the SpaceX IPO should it come to pass, and I expect it will. And then OpenAI… if those go well, then the floodgates will probably open.” (31:02)

Notable Quotes & Timestamps

On Blockchain’s Potential:

“Blockchain can in fact rewrite our financial markets as they exist today in a really exciting way… it’s going to happen a lot faster than 95% of market watchers believe it will.” – Tom Farley (07:48)
On IPO Transparency:

“How is this not more transparent? How is there not a market clearing mechanism here that everybody can participate in?” – Tom Farley (16:26)
On Retail Participation:

“Retail wants more control. They want more discretion, they want more power at their fingertips. They want to be the one actually pressing the button.” – Tom Farley (21:36)
On The Future of IPOs:

“I’m hopeful—it’s an orderly IPO… I hope it’s not kind of a big blow off top sort of situation where retail is buying at the very high.” – Tom Farley, on upcoming SpaceX/OpenAI listings (31:12)

Essential Timestamps

Early blockchain investment & NYSE/Coinbase story: 04:20–05:18
On institutional adoption and regulation: 08:32–10:06
Defining the three levels of blockchain market transformation: 10:32–12:48
Debating future of stock exchanges in a tokenized world: 13:12–14:16
First-hand IPO lessons and retail allocations: 15:27–21:21
Decline of early-stage IPOs and regulatory causes: 23:54–25:57
IPO environment, SpaceX and OpenAI as watershed moments: 29:04–31:45

Memorable Moments

Tom’s early foray into blockchain investing via a neighbor who founded Coinbase (04:34).
Bullish’s retail allocation move; SoFi’s pivotal role “moved heaven and earth” (20:36).
Candid admission: “I thought I was an expert in IPOs… I was really wrong” (15:34).
Cautionary note on retail’s vulnerability in IPO hype cycles and hopes for orderly SpaceX/OpenAI IPOs (31:12).

Takeaways for Investors

Blockchain’s transformative impact is accelerating—beyond crypto into mainstream finance and securities.
Retail investors increasingly shape the market and demand direct access and fairness.
IPOs are still a key path for legitimacy and growth, despite structural and regulatory hurdles.
The coming year could be revolutionary if major companies like SpaceX and OpenAI go public successfully—potentially unlocking a new IPO wave.
Transparency, equity, and technological progress (especially blockchain) are central to the next era of public markets.

For more, read Liz Thomas’s column on SoFi’s website or follow @LizThomasStrat on X.

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Transcript55 lines

[00:00]
A
I thought I was an expert in IPOs because I oversaw, in quotes, 600 IPOs while I was at the New York Stock Exchange. I was really wrong. I was completely unprepared. The number of public companies is dwindling. The number of really great young companies that are going public has been dwindling. Continuing to raise the alarm is my best approach.
[00:18]
B
Does it make things like the New York Stock Exchange obsolete? Hi there. I'm Liz Thomas, head of investment strategy at SoFi. And this is the important part. The IPO market is a big topic of conversation in 2026 and retail investors are more involved than ever. But the landscape has changed. Companies are waiting longer to go public and you're seeing new companies in blockchain and crypto pop up in both public and private markets. So what does that mean for you as an investor? Today's guest, Tom Farley, CEO of Bullish, knows a thing or two about IPOs and how they've changed over the years. He took Bullish, one of the leading crypto exchange platforms, public last year and he was the president of the New York stock exchange from 2014 to 2018, where he oversaw multiple major listings including Alibaba, Snap and Spotify. Tom, welcome to the show.
[01:19]
A
Hi there. Thanks for having me, Liz. Very excited.
[01:21]
B
I am pumped about this. But before we get into it, nothing in this episode should be treated as a recommendation from SoFi. And this is not investment advice. Okay, let's start sort of macro. But I first learned of you when you were President of the NYSE. For those of you who don't call it the NYSE. NYSE is New York Stock Exchange that ended in 2018 and since then it seems like you've made a pretty clear pivot into what I'll call innovative finance. So there were a couple stops before Bullish, but you invested in fintech companies and then eventually made this full pivot into crypto. So let's talk about that transition with. Did you see something happening in the markets back when you were president of the NYSE or around that time that told you this is the right direction to go? I need to go full steam ahead on fintech, crypto, so on and so forth.
[02:14]
A
I'm not too creative, so I just keep running the same play in my career, which is use innovative, even seemingly avant garde technology and apply it to old concepts, old ideas, old businesses. So my first big break was going into an all floor based futures exchange where on day one I went in and was shocked to find out in the year 2008 it was all paper based. There were carbon copies crumpled up, thrown everywhere, keeping track of trade tickets. And my job as the young whippersnapper was to introduce electronic trading. And it wasn't easy because as you probably know, if you know a few of them, the floor trading crowd are very bright and they're very tough and they didn't necessarily love electronic trading. And so I learned a lot of lessons in persuasion, but was able to introduce electronic trading. And then I went in to run the New York Stock Exchange that had evolved quite a bit from its, its roots. For example, there was electronic trading, but they were operating on very old systems. They still had paper based processes, still a lot of manual processes. And, and my job was to go in again to introduce avant, more avant garde electronic trading technology, more dependable from the customer's perspective, more reliable and bring efficiencies down into the New York Stock Exchange organization. Fast forward. Today we've announced we're buying a business called Equinity. Now what a quinity is, is the transfer agent for one of, one of two main transfer agents for the global equity markets, essentially, which means they keep track of who owns what for your SOFI customers, who owns what share of, of which stock. Again, sort of a old school business still has a lot of, not manual processes, but cumbersome processes. And without kind of an avant garde technology to bring it into the 21st century. In this, this case, we're not just bringing electronic trading, which of course we are, but that's kind of the standard now. We're also bringing blockchain technology. So this is kind of the third iteration of this strategy. If I can just answer all parts of your question and you allow me to monologue for a moment more my interest in blockchain. I came honestly, my neighbor was walking across my lawn and I said, hey Danny, are you going back to Duke? And he said, no, I've graduated. I'm going to start a blockchain company. And this is 2013, I know I'm going in as the President CEO of the new York Stock Exchange. And he proceeds to tell me about this blockchain thing that I had no idea about and how it's going to early. Yeah, it was very early. And how it's going to disintermediate places like the New York Stock Exchange. And so I convinced him and his roommate to let the New York stock exchange put $10 million into that business, which was Coinbase. And so that's how I got into blockchain and negotiated board observer rights for Myself, so I could learn this industry on behalf of the New York Stock Exchange. And I always wanted to get back into it. And so once I had the opportunity, I jumped at it. My wife observed this weekend, like, you just seem so excited about work, and I am.
[05:20]
B
That's a great place to be. And I'm sure you know, crypto winters don't help when prices are down and it's a tough time to be in it. But if you really believe in the underlying technology, you really believe in the path of that, that innovation, it's a lot easier to sit through. And especially if you've made a career of it, then it's like, I'm not just on this train for a few minutes, right? I'm. I'm here for a long time, not a good time. And I think those winters are the times when it really tests people's patience, but it also tests your conviction in all of it. And it's. It's fascinating to watch, I guess. I wouldn't say I'm on the sidelines, but I didn't devote my career to it, so it's interesting to watch. And I didn't know that you were in it before or even at the beginning of the New York Stock Exchange. So this wasn't a big pivot for you. This was like going on behind the scenes. And then you finally went all in when. 2021.
[06:12]
A
Yeah, 2020. Going back in time to that Coinbase investment memorandum was blockchain was this new layer of programmable finance that would be more transparent to the users, your customers, to issuer clients like public companies, to investors like Fidelity Wellington. But it would also be auditable. It would be always on 24 by 7. And it basically would just lower the friction and lower the cost of this beautiful free enterprise system of which we are all a part. And that's why we did the investment. And that was in the investment memorandum. It was completely wrong. That did not come to pass for a decade. Meaning what the digital asset space was about from 2013 to 2023 was, by and large, the trading of crypto assets, as opposed. And by, by and large, retail and a very particular group of crypto native hedge funds or institutions or trading firms. And so the crypto winters that you referred to, usually people are talking about with respect to price movements up and down. For me, the thing I've always tracked is the institutional involvement. And it's been a long winter. Yeah, it's been one long continuous winter.
[07:32]
B
It's spring now, isn't it?
[07:34]
A
It's Spring. Now it's more than spring. So we at our consensus conference that, that we put on in Miami, we were down there and JP Morgan has, has a big booth. I spent time with Franklin Arc had a big presence, you know, banks and equity participants. I saw the New York Stock Exchange, I spent time with the Nasdaq, I spent time with DTCC. You never would have seen this even two years ago, let alone five years ago or 10 years ago. And so the institutions are coming. And the reason why that's so important to me personally is it's validating what I've long thought, but it's been delayed gratification, which is blockchain can in fact rewrite our financial markets as they exist today in a really, in a really exciting way. And I think that's what's going to happen. And I actually have become a full on cheerleader in the sense that I think it's going to happen a lot, a lot faster than 95% of market watchers believe it will.
[08:32]
B
The fear is that it would make financial markets as we know them obsolete. Somebody told me this is at least five years ago now that blockchain and crypto is going to make the New York Stock Exchange not exist anymore. And that I think people hear that and it's too disruptive to think about. But the question I want to go to first is what brought the institutions in? What was the moment? Because nobody wanted to be first, right? Nobody wanted to be the first one that said, you know what? Yes, let's start to invest a bunch in that. Once you got that first one, two, three in, then everybody started to do it. But what caused it?
[09:10]
A
The new administration is just bringing in an administration that was more friendly to this type of innovation and made it really clear on the very first day hey, we're not coming after you to sue you unless we, we see some fraud or, or, or, or malfeasance. And then the second thing, which is a cousin of that but, but distinct is completed laws and regulations passed emanating from those laws in major western and western style economies. So think the European regulation for crypto called mica, the Hong Kong regulation that the SFC passed and, and then most importantly the Genius act which was a bill passed by our Congress, both houses signed into law which really validated stablecoins, which is something I know is very important to Sofi and Sofi has some really great ideas on. And so all of that put together, if you're Ted Pick or you're Ken Griffin, you say okay, now's the time. Yeah. Now's the time to do it. And it's really, it's really nothing other than that.
[10:06]
B
Yeah.
[10:07]
A
And that's what we see all around the world. I mean our, our incremental customer, our marginal customer now has the, has the name bank or investments, know, insurance or something like that in its title.
[10:16]
B
Right. So if you think it's spring in the institutional adoption, we're still early in that and many more are going to jump on this train or the, the institutions that are already in on it start to go in much bigger. How does this grow over the next few years?
[10:32]
A
Well, let's define what, what we're talking about. The, the way I think of it, which is probably distinct from how most people think of it, but it's, it's a framework is you have crypto assets. So think Bitcoin, Ethereum, Solana and many others that are known to your listeners. So you have the crypto assets. Then you have stablecoins, which are really just so called tokenization of the dollar. And when I say tokenization, I'm referring to the representation of an actual asset in the form of a token on a, typically a public blockchain. Okay. That is the US Dollar being tokenized. And it's been a massive success. Gone from 0 to I think 325 billion of market cap. I read over the weekend that Visa put out a study. They, they think there was $12 trillion of payments. So stablecoins exchanged in the, in the last 12 months.
[11:31]
B
Supposed to be one to one to the dollar.
[11:34]
A
That's supposed to be one to one of the dollar. And what the genius act did is kind of codified that that short of fraud or other malfeasance, it's not only one to one, it's one plus a little, a little margin. And in fact all the reserves have to be held in dollars or something that looks a lot like dollars, like very short term liquid investments.
[11:51]
B
Got it.
[11:52]
A
And then the third, which is the one I'm the most excited about, we're in the earliest innings, you know, to use the baseball metaphor, we're in the top of the first inning and the first batter is just fouled off a couple pitches. And that is the tokenization of the $270 trillion global securities market. And that's where I'm the most excited. You're going to see the ability to trade stocks in the form of tokens. And I'm not talking about trading a token. That's a contract to someday own the stock or trading A token that sort of duplicates the return of the stock. I'm talking about the token is the stock, it is the ownership in the company. You can get dividends, you can vot, you can do everything with that security and many, many more things than you can with an old school certificated share. And that's just stocks. Then of course there's fixed income bonds and the like.
[12:48]
B
So that's how I was under the impression, tokenized security. They're two separate instruments that you've got a stock that underlying that trades on the exchange from 9:30 to 4:00pm Eastern Time and then you've got the token of that stock, let's say Apple, right? You've got Apple stock that trades normal, normal trading hours and then you've got a token of Apple stock that trades 24. But they're separate instruments and there could be a spread between the two. Am I wrong?
[13:13]
A
So no, that absolutely could be the case. Will we continue to see trading of certificated shares? Absolutely. No. No question. I'm struggling to understand. Once we as an industry have solved the regulatory hurdles and we've plumbed tokens into things like the market trading rules that exist in this country, I'm struggling to understand why we would still need to trade these old school certificated shares. Because the token will just be better. You'll have 24 by 7 access, you'll have way more visibility, you'll have way more maneuverability of the token. It's very, very difficult to move your shares around. Try calling your broker and asking them to move it to another broker or God forbid, try calling a transfer agent and transfer it to another transfer agent or another broker. Whereas with tokens you don't have any of that. So I tend to think that we will see a day relatively soon, meaning in the next decade, not in the next 10 days or where it just kind of all moves to tokenized trading because it's a, because it's a better mousetrap.
[14:13]
B
So, so does it make things like the New York Stock Exchange obsolete?
[14:17]
A
Well again, go back to, you know, I'm not a visionary and I just go back to pattern recognition. You know, when you had the introduction of electronic trading, it first of all was an explosion of innovation. They were very, these were very fun times and it was similar to this, just a better mousetrap. And certainly you saw companies just disappear, they just stop existing. But the, the far more common case for great businesses like the NASDAQ and their market position and NYC and their market position, the far more common case is they develop or acquire the technological capability. So I think there's going to be a lot of consolidation. There's going to be a lot of investments in technology. You're already seeing it. All the old traditional finance exchanges and plumbing businesses have put out announcements about. Here's how we're doing. Token. The. The game of chess has begun. And I don't know how it's going to play out, but it's not like the New York Stock Exchange is going to disappear. Absolutely not.
[15:11]
B
Okay, let's talk about IPOs. You took bullish public in August of 2025. So that was after, obviously, you spent time at the nyse. What did you learn about the IPO process that you didn't yet know?
[15:28]
A
The IPO process needs an upgrade.
[15:31]
B
I was gonna say it's real smooth, right? It's real easy.
[15:35]
A
I thought I was an expert in IPOs, because I oversaw, in quotes, 600 IPOs while I was at the New York Stock Exchange. And, you know, we performed this coordination role or this orchestration role, and I thought, geez, I've. I've seen it all. I was really wrong. I was completely unprepared. Going through the process myself as the listed company chairman and CEO, I saw a completely different perspective. And the things that I saw made me even more confident in the business that Bullish is becoming. In other words, using blockchain technology to bring this layer of transparent programmable finance, equitable programmable finance, to the US equities markets. When we were going around and we would have these meetings, we would get feedback and the feedback would be okay. Yeah, we talked to Jen. She wasn't in the meeting, but she talked to Carl. And Carl had some positive feedback. And we think he's gonna be good for maybe up to 38 a share. But we won't know until the night of the pricing, and then we'll get a feel for it. And I'm just looking around like, is this a joke? How is this not more transparent? How is there not a market clearing mechanism here that everybody can participate in? And what I saw was we became a very hot IPO. And IPOs tend to be binary. They become very hot or they become difficult to get over the line. And for a bunch of reasons unrelated to our business, actually, we became a hot ipo. Yes, we had a good business. It's not false humility. I'm proud of what we've built, but it happened to be a really, really great time. Well, all of a sudden, the allocations to retail started going down. Oh, well, you got to have this institutional investor in, and you got to have that institutional investor. And we said, well, wait a minute. Why were we giving retail more, you know, a week ago when we didn't know if this was a hot ipo? So I didn't love that part of it either.
[17:30]
B
I think gets the tail end.
[17:32]
A
Yeah. Yeah, we need to. We need to figure out how to make it more equitable. I saw some other issues, too, where some of the electronic brokerage platforms that service retail didn't give the ability for retail to have limit orders on their. On their IPOs. So, you know, our IPO traded up to $122 a share, and that's somebody's mother who was buying $122, or somebody's brother who's buying $122, which was not a reasonable market price in my estimation at that moment in time for Bullish. So there's just a lot that I think needs to be fixed. And I know I sound like I'm a hammer and everything looks like a nail, but that's part of what blockchain technology does. It's all out there in the open. You can see everything that's happening, and there's. Sunlight is the best disinfectant. And providing transparency will help us improve this. This model all around.
[18:24]
B
Well, and you can see everything that happens. And I think, too, the. The volatility that's inherent in IPOs, right? Something goes public, there's a price that it goes public at. And Bullish was one of these. But this happened to a bunch of stocks right around that same time. They fly up, you know, three times what they went public and then crater a week later. And. And that volatility, especially as retail investors, if they haven't done it before, because now retail investors can be more involved. They experience that, and it's. It's a bad experience. It's like, well, I got burned. Now I don't want another ipo, right? And understanding that that's part of. Part of the game, sort of of having an ipo, and that's why you buy it early and you wait for it to do what it's supposed to do. But I wonder if in this future world that you're talking about, if all of the blockchain technology makes it more transparent, then does the volatility of something like IPOs die down, too?
[19:22]
A
I want to add one thing related to this on onto my last answer. We. We did something I'm very proud of. We actually. And this Was not easy. I won't be too specific, but there were a lot of entrenched interest against what I'm, what I'm about to describe because we were a hot IPO. And I knew it, frankly, because we had 51, 52 one on one meetings and we got 51 orders.
[19:48]
B
Oh, wow.
[19:48]
A
We were oversubscribed. I don't remember the exact numbers, but literally 20 times or more. So we, we were going out to raise 1.4 billion. We had 30, don't hold me the exact number. 30 billion of demand. Yeah, we increase the retail allocation at the IPO price. So in other words, we gave more shares to retail than any other IPO I've ever seen, with the exception of when Robinhood themselves went, went public. And so that's great. I feel really good about that because we, we allocated those shares or whatever the IPO price was. I think it was 37, it may have been 34. And then the stock traded, like I said, up to 122. Even when it settled, it settled at 80 or what have you. So those gains went disproportionately to retail,
[20:34]
B
which you allocated 30% right.
[20:36]
A
To retail. I think we allocated in the, in the final instance, I think we allocated like 21% to retail. But that's including through SoFi, which was great. SoFi moved heaven and earth to be able to provide that opportunity for its customers in a much larger size than they typically would. So I'm proud of that. I want to draw the distinction between that and somebody buying on that day at $122.
[20:59]
B
Sure, yeah, yeah, yeah. Okay. Well, talk about retail though too. I mean, there's, there's the IPO process, but just the retail trader in general. Right. They have so much more available to them by way of information, by way of interest, and just all the vehicles that they can buy. So talk about how you view the importance of the retail investor in today's markets. And does it change the market? Does it change the way the market behaves?
[21:26]
A
To answer your question directly, retail is becoming the marginal price setter and is becoming far more, has become really far more important than at any time during our lifetimes. Like when I was growing up, if my parents had a few extra shekels, which they didn't, usually they would call a broker who they went to church with and they'd say, hey, Frank, what do you think I should buy? And Frank would say, oh, there's this new, you know, Ford is coming out with a new car. I really think you should Go into Ford and then they would put some money with, with Frank at Smith Barney or what have you. And what's happened over the last 30 years is retail wants more control. They want more discretion, they want more power in their fingertips. They want to be the one actually pressing the button. They've realized because of people like Warren Buffett, frankly, or Vanguard blanking on the amazing founder of Vanguard's name, have kind of taught a whole generation that just trusting someone to say go buy Ford probably isn't a great idea. You should probably construct a portfolio. You should be focused on cost, you should have eyes on your money. So it's a whole new model where you have to appeal to retail, for example, as a public stock bullish. Because if you're not, you're missing the marginal price setter.
[22:42]
B
Yeah, well, and things have changed too. Not just from a retail perspective. I mentioned this in the intro of this whole episode that companies are waiting longer to ipo, and it seems like maybe it's not the thing that you aspire to anymore necessarily, because private equity is a big player now too, that's grown a ton. And there are even retail investors that can invest in private equity now. So is the, the old model that I started my career believing of you. The idea is you buy a company when it's a small cap, you watch it grow into a mid cap and then it becomes a large cap. And that is the life cycle of success. Right? And that's the investing journey that you want to be on with these companies. Is that done? Because now we've got, we've got fewer small cap companies or we've got a lot of really non profitable small cap companies and it's as if the market has sniffed that out and doesn't necessarily want them anymore. And a bunch of companies that are in the most important sectors, technology blockchain, whatever it may be, are going public at billions and billions of dollars of market cap. So is that life cycle over?
[23:55]
A
It's a great question. Chuckling Only because I remember getting that question in 2014 when I had first gone in to run the New York Stock Exchange. I spoke at an event at the Economic Club in New York and I got the same question and my answer was very strident. No, it's not over. And we're going to be able to bring these companies back at an early stage. The Airbnbs and the Ubers and the Alibabas and the Snaps, we can get them to go public sooner. And that's ultimately a great thing if you care about wealth inequality because that way it's easier for the pensions and the every man and every woman to be able to invest in the extreme price appreciation of these companies. And here we are 13 years later and SpaceX is contemplating going public at over a trillion dollars. So it absolutely, positively has been a dream deferred at a minimum. There's been really no positive progress. Sarbanes Oxley makes it super duper expensive to be a public company and complex. I'm seeing it firsthand. There's more and more regulations that continue to be passed and promulgated. We just had one recently that as a foreign private issuer, I have some new restriction on me that just popped up. Well, this just got passed. This was a rule that's been in the works for two years. And I'm thinking, holy smokes, this is the most progressive sort of free market SEC that we've had in my entire career. And there's still regulations that are coming in that make it difficult to be a public company. So I'm optimistic it will change at some point in time. We're going to continue to need to have brave leaders and I would put Chairman Atkins in that bucket. Truly, as somebody who wants to fix it, wants to lower the costs of being a public company, wants to lower the legal risk and all the ankle biter lawsuits that you get as a, as a public company. But we are nowhere in that regard right now. Let's be clear. The number of public companies is dwindling. The number of really great young companies that are going public has been dwindling. So continuing to raise the alarm is my, is my best approach.
[25:57]
B
I'm going to ask a question that is, it's not rhetorical. I want you to give your honest answer. Probably an obvious answer is your background is with public companies, but did you consider private equity instead of IPO for both?
[26:11]
A
No. And part of it, you know, I'm like Mr. IPO and Mr. Public Company. Maybe a little bit of it's just entrenched thinking I can't shake. Our plan was let's double down on being pure as a driven snow like we have. We've had Deloitte for six years. We have excess cash in our balance sheet. We sought out the toughest regulators on planet earth for our regulatory status. Other companies will say, oh, I want to go into Europe, so I'll go in through Malta or Cyprus, kind of the, you know, the JV regulators. We went in through the Germans, you know, to give, to give you a sense. And part of that doubling down was, let's go public on the US Public markets and let's hold ourselves out as a firm willing and actually seeking out that scrutiny to be able to demonstrate once this institutional wave comes, that the sofi's of the world, great companies, really well run, who are looking, in this case, you know, SoFi needs some liquidity for Bitcoin to provide their customers. They're going to look at us and they're going to go, oh, I like the cut of their jib. And so we made that decision ironclad. Not everybody agreed with it. The board had my back. In fact, the board was, was pushing for it as much as we could. And so when we saw a window last June, we called the bankers and we said, cancel your Hamptons rentals. We're going with this sucker and we're going to make it happen here in the next eight weeks. And we were able to get it done. And I haven't regretted it for even a moment. And in fact, Liz, people talk about benefits of being public. We just did the largest crypto acquisition of all time. We announced it last week and we're paying $4.2 billion for this equinity business. And it's going to be awesome to have this tokenization engine combined with the value added services that Bullish already provides. The seller was not going to sell for cash because we paid a price that was not an exciting price for them. But they would sell for stock because they believed in the vision as much as we believed in the vision. Well, guess what? We ain't doing that if we're a private company. The only reason we could pay with stock is we could point to our stock trading on the New York Stock Exchange. We could demonstrate the value, demonstrate the liquidity, and that enabled us to do this transformative transaction. So being public has been a superpower for us. It's brought us a lot more customers. It's brought us this, this public currency and it's certainly brought us respect with regulators all over the world as well. So I would encourage others. And I said the same thing to Mike Belshi at Bitco when he was contemplating an IPO and others who have, who have gone public. It's been nothing but helpful for us now getting ready for Sarbanes, Oxley audits and compliance and all that stuff. A lot of it is over ra. A lot of it is time wasted is a pain in the ass, but it's worth it.
[28:52]
B
Okay, last, last question on IPOs, is this a healthy IPO environment? And if it isn't what makes a healthy IPO environment?
[29:04]
A
I think it is a healthy IPO environment. This summer when we went public was a hot IPO environment, which you might argue isn't healthy. I mean you saw circles IPO and just ridiculous price appreciation there and then figma, which proved to be a little bit overdone and then bullish. So that's what a hot market looks like. I think the current IPO market with stock market indices near all time highs is a good one. It's definitely a selective one. So you have to have an excellent business. Sometimes when the market's so hot, people will just lob in orders because they know that the price is going to go up when the company IPOs. Now it's more selective and I think that's because there is a lot of risk in the world just with what's going on in Iran geopolitically, uncertainty about these midterms. So it's not like any old Tom, Dick and Harry with a business can take it public. But yeah, I do think it's a good environment. Right now would be my general take. Do you agree with that?
[30:09]
B
I do. The only thing that I think is maybe working against it, and maybe this is why it hasn't been hotter, is the constant concern over valuations. Everything's too expensive. So now when we take things public, you've got maybe a more discerning investor who says like I'm just gonna wait, I'm gonna wait out that volatility and I'll buy it later when it's on sale.
[30:31]
A
Yeah, that's what's happening.
[30:32]
B
So then the company itself, as it goes public, it isn't as beneficial.
[30:37]
A
Right.
[30:37]
B
Because you got to go through those ups and downs and then probably settle out somewhere below your IPO price. So. And that's difficult to model for a company. It's how do we, how do we model the capital that we're going to get out of this transaction and all the work that goes into going public and then you can't really model out what it's going to look like a year from now. So I think the valuation story is working against the IPO market a little bit.
[31:00]
A
I'm stating the obvious, but the big moments will be the SpaceX IPO should it come to pass, and I expect it will. And then OpenAI, which OpenAI is anthropic. OpenAI is talking to bankers and doing bake offs for an IPO with SpaceX. I'm hopeful there's such a cult around. Elon. I'm Hopeful it's an orderly ipo. And go back to the retail conversation. I hope it's not kind of a big blow off top sort of situation where retail is buying at the very high. I'm a little bit concerned about that and I hope that it kind of trades in line with fundamentals. But those will be two big moments and if those go well, then the floodgates will probably open and we might
[31:46]
B
know about both of those in the next six months.
[31:48]
A
Yeah.
[31:49]
B
Yeah. Okay, great. Well, thank you, Tom, for coming. Thank you for sharing all of your wisdom and all of your experience. I think this is maybe one of the better, well encompassed episodes. We talked about blockchain, crypto, IPOs, what the stock exchange used to look like, what it might look like in the future. So I think our listeners will really enjoy it. Thank you.
[32:07]
A
I enjoyed it thoroughly. You're very insightful yourself and ask great questions and I'd love to be back someday, of course.
[32:20]
B
What a fascinating episode. We talked about so many things that could shape the future of finance for years to come. A couple big takeaways. Tom was talking about blockchain being able to rewrite markets as we know them and that it's happening a lot faster than people think. So this is something to really keep in mind as investors as you watch how things evolve. And then we talked also about, we're in the early phases of this, very, very early phases, but the idea that stocks can trade as tokens at some point and what that will look like, whether there's going to be two separate instruments, what that means for exchanges going forward. I think that will also be a really interesting journey to watch as markets evolve. And then as far as the IPO environment right now, it was promising to hear him say that it's a healthy IPO environment from somebody who knows so much about IPOs and has watched so many of them happen. The idea also that retail investors want more control and power at their fingertips and retail investors are more involved in IPOs than they ever have been before. And I think it's great that retail investors can have that available to them because they're learning about what it means to become a public company. They're also learning about volatility and what it looks like in the IPO market. And I think that's really valuable experience for all retail investors to have. And then lastly, Tom talked about bringing bullish public and how it brought them a lot more customers and legitimacy. And I don't think that they're the last company that's going to have that experience, particularly in the blockchain and crypto space. So thank you very much for listening or watching, and I look forward to bringing you the next episode next week. For more from me, read my weekly column in SoFi's newsletter on the money and on the SoFi website, or follow me on X at Liz Thomas Strap Follow the Important Part Wherever you get your podcasts. The Important Part is produced by SoFi in partnership with Sony.
[34:17]
A
Podcasts investments are not FDIC insured, are not bank guaranteed, and may lose value. Elizabeth Thomas is a registered representation representative of SoFi securities and a registered investment advisor with SoFi Wealth. This podcast is brought to you by SoFi Invest, which is a trade name used by SoFi Wealth LLC and SoFi Securities LLC. This podcast is for informational purposes only. Investing involves risk.