Canada will struggle to find another stock-market success story like Shopify Inc., according to Daniel Nowlan of National Bank Capital Markets, as the country faces a public-listing drought and a delisting trend. Nowlan, the firm's vice chairman and managing director of equity capital markets, said the Canadian market is seeing a "hollowing out" of smaller companies seeking to grow into larger, globally meaningful firms.
He pointed to Shopify, which began trading on both the New York Stock Exchange and Toronto Stock Exchange in 2015 after a larger-than-expected IPO. The e-commerce software company has grown into one of Canada's largest firms, worth roughly C$300 billion ($214 billion), second only to Royal Bank of Canada, according to Bloomberg data. "It's tough to imagine that happening today, starting with the size they did in growing to what they've become," Nowlan said on a panel at the Toronto Global Forum. He contrasted this with the US, where smaller companies that stay listed can surge to valuations in the hundreds of billions of dollars.
Most firms going private in Canada from 2020 to 2025 cited undervalued shares, low trading volume, excessive disclosure requirements and difficulty accessing capital, according to the Institute for Governance of Private and Public Organizations. Nowlan also placed Dollarama Inc., with a market value of about C$56 billion, in the same category, saying it was "hard to imagine" the discount retailer listing today and becoming a global large-cap company.
The Toronto Stock Exchange has faced an IPO drought in recent years. Since 2020, 351 companies have exited, with 41 delistings this year, according to TMX Group. Eight firms listed via IPOs as of Sept. 30, and 19 moved over from the TSX Venture Exchange. Roughly two-thirds of delistings since 2020 resulted from mergers. Robert Peterman, chief commercial officer at the TSX, said market consolidation and acquisitions of listed entities have increased as companies seek growth.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing