Investors in Novonix Ltd (ASX: NVX) shares know they can find this lithium battery company's stock listed on our own Australian Securities Exchange. After all, Novonix is an Australian company, so it makes sense that its shares call the ASX home. Or do they?
Yes, Novonix shares are listed on the ASX, and have been since 2015.
But the company also has a secondary listing on the NASDAQ exchange. The NASDAQ is one of the two major exchanges in the United States.
Novonix only initiated its NASDAQ listing in February of this year under the ticker code 'NASDAQ: NVX'. Prior to that, the company had an 'over-the-counter (OTC)' listing on the US markets (ticker code OTCQX: NVNXF), which it maintains today.
Novonix's NASDAQ shares are actually what is known as 'ADRs' or American Depository Receipts. The ADRs are really certificates representing ownership of Novonix's ASX shares. One NASDAQ ADR represents four ASX shares.
So why does Novonix have two share listings? Isn't the ASX good enough for this company?
Two listings for Novonix shares
Well, the reality is that the US markets are significantly larger and more capitalised than the ASX is. As such, many companies list on both exchanges, or even just the US, to take advantage of this. Just look at 'Australian' company Atlassian Corp (NASDAQ: TEAM), which only calls the US home.
Further, a major investor in Novonix is US energy giant Phillips 66 (NYSE: PSX). So it's possible that a presence on the US markets is advantageous to Novonix from a financial standpoint.
Here's how the company justified its NASDAQ listing in a January announcement:
Establishing this program is part of an ongoing strategy to expand NOVONIX's reach to investors in the United States and make the Company's securities potentially eligible as a direct investment for North American institutions and fund managers.
So that's why we see multiple listings for the Novonix share price around the world.
