Texas is becoming a hotspot for businesses to relocate: a new CBRE report shows three of the top five markets that gained headquarters between 2018 and 2023 all belonged to the Lone Star State.

Yahoo Finance's Rick Newman joins Asking for a Trend to discuss why companies are eyeing Texas and the possibility of a new Dallas-based exchange.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Melanie Riehl

Video Transcript

One state has been catching the eye of several corporate corporations.

Texas become a hot spot for businesses to relocate.

It really has in the past few years here.

And so if you look at this from 2018 to 2023 according to CBRE, they look nationwide at the number, at the cities and the number of corporate headquarters that they were attracting.

Austin was number one here.

We know how popular that's gotten.

It saw a huge boom in real estate that now is seeing a little bit of fallout Dallas as well in Houston.

So the top three cities cities in Texas, then you see Nashville and Denville, this Denver, this doesn't necessarily mean that there has been a population that's followed these headquarters in some cases.

It's just sort of certain executives that are based there in Texas and the rest of the workforce might remain elsewhere.

But nonetheless, it definitely has been a trend here.

The latest news is that there is a Texas stock exchange that's in the works that's getting some big backers from the likes of Black Rock and Citadel.

So that's just sort of the latest headline grabber uh of what's happening in Texas.

But we wanted to talk more broadly about this Texas mi migration trend.

Let's at Yahoo Finance's senior columnist, Rick Newman.

And on this Rick, we thought of you because, uh, you know, there is sort of a politics overlay to all of this as well.

Texas doesn't have income tax, right?

It has a certain political tilt in recent years.

Although they say Austin is a bit of an island in that regard.

So it's been interesting to see this kind of corporate move, right?

Uh I'm not sure.

It's that surprising though, Julie.

Uh so uh Governor Greg Abbott in Texas, he's similar to Governor Ron desantis in Florida.

They characterize their states as places where woke goes to die.

Um Don't bring your woke policies down here.

We're all about business.

Uh Let's keep things traditional.

So, um you know, for when we're talking about a new stock exchange, uh I'll quiz the audience here uh and ask people, how many stock exchanges do you think there are in the United States?

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People might say, well, I've heard of the New York Stock Exchange nyse, I've heard of the NASDAQ.

So two and in fact, there are 13 stock indexes in the United States.

There's one in Boston, there's one in Chicago.

Uh there's others in different cities.

And uh I think most of those kind of harken back to a time when those cities in those areas were more of more like industrial centers, which they're not so much anymore.

So Texas obviously is a business haven.

Um Obviously the US energy uh industry is, is basically um lodged in Texas in both where the energy comes from in the Permian Basin and all the energy companies headquartered in Houston, for example.

So I guess this makes sense, but it, it doesn't mean that um big companies are just gonna automatically jump from the NYSC or from the NASDAQ over to some, some less woke.

Um, exchange.

That's ba that's based in Texas.

I mean, that has to be a really good reason.

Uh, financial reasons.

I mean, companies have to, uh, protect their fiduciary responsibility to shareholders.

There has to be a good financial reason to change exchanges.

I looked this up today.

This is not something I really knew about, but NASDAQ has actually managed to lure a few companies from the NYSE and they do that, that by saying things like, um, you're gonna have, your stock will have less volatility on our exchange.

Technical matters involving the close of trading and the auctions at the beginning at the end of the day.

And when the companies think, well, we think, yeah, that'll be good for our shareholders.

They might make the job.

It doesn't happen very often.

Maybe a Texas Exchange would be able to get some IP OS um, in the energy market in Texas or in other parts of the market down there.

Um, but, uh, you know, this could be, uh, this isn't a bad thing and it could be beneficial down the road.

Well, it's interesting, you know, I, I thought it was a bit surprising to see the reports that Blackrock was one of the companies that was backing this, considering, uh, they've come under fire from certain pension funds, for example, in Texas who see them as their, and their esg agenda of the past as being somewhat quote unquote woke.

Right?

And yet here they are reportedly backing this exchange.

I, I don't, I would guess that, that, that this idea that this is somehow about ESG and DE I and all these multi multi letter abbreviations um that this is a bit of a red herring because um I, I think if any company were to actually choose an exchange based on something like uh we just want to be with the ant where the anti woke people are.

I, I think you're, I, I would guess you're opening yourself up to shareholder lawsuits if there's any claim they could make that.

Um there's that it's financially disadvantageous to be on some upstart exchange.

I mean, you know, the NY IC and, and the NASDAQ would tell you, look, we have the deepest markets, we have the most in institutional investors on our platforms.

We are the place you want to be uh to serve your shareholders.

And I, I just don't think AC can say, yeah, but we want the anti Woke exchange II, I can, I can see that not being that popular.

So, uh if this does get off the ground, I think, I think that they would have to make a case um on financial grounds that this would be good for, you know, maybe it'll be, you know, the NASDAQ, for example, focus on tech companies, right?

Even though it's grown beyond tech companies.

Um so maybe uh a Texas Exchange could focus on energy companies.

I mean, remember like when Facebook went public, there was a huge battle over which exchange would get the IP O so maybe we have some big energy um IP OS in the future and maybe one of them says we'll give it a shot with the Texas Exchange because we think that they're in our neighborhood and they have what we need.

So maybe that's where this is going, maybe so we shall see, Rick.

Thanks so much for covering it for us.

Appreciate it.