Why do companies switch stock exchanges?

General Motors (GM) has been listed on the New York Stock Exchange (NYSE) for over a century.

Jim Cain, director of financial communications for the company, said that those hundred-plus years have gone well.

“The quality of execution on both the New York Stock Exchange and the Nasdaq is very similar and very high quality,” Cain said.

But by listing on the Nasdaq later this month, GM will be eligible to join the Nasdaq 100 index, which would bring with it a bunch of new investors.

“It's that opportunity to be part of one of the most actively-followed indices in the world that helps us expand our ownership base,” Cain said.

Joining the Nasdaq — which is home to many major tech companies — is also a chance for GM to talk up its tech bona fides. Cain pointed out that technology is a big part of car manufacturing today.

“We've been going through this transformation where we've been making significant investments in AI for our vehicles and electrification and autonomous driving technology,” he said.

GM isn’t the only company joining the Nasdaq. Hilton, which has hotel brands ranging from the Waldorf Astoria to Homewood Suites, rang the opening bell at the Nasdaq stock exchange in New York on Thursday to mark its own switch from the NYSE.

The Nasdaq’s tech brand has played a major role in multiple companies’ decisions to switch. In Hilton’s announcement about listing on the exchange, it talked up its new AI-powered trip-planning technology. Walmart, when it switched last year, said in its press release that both Walmart and Nasdaq redefined “their respective industries through innovation.”

“Sometimes, they're trying to rebrand and emphasize that they are a different company than they used to be,” said James Angel, a finance professor at Georgetown University who has advised the Nasdaq in the past.

Alternatively, Angel said that some companies might want to move to the NYSE because there’s a certain prestige that comes with it. Or the swap from one exchange to another can also be relationship-driven.

“[Maybe] you get a new CFO who just likes one exchange more than the other,” Angel said.

This kind of competition between stock exchanges is unusual, according to Jay Ritter, director of the IPO initiative at the University of Florida.

“[In] almost all countries, you've got a main market where all of the big companies are listed, and then some countries also have a junior market,” Ritter said.

The idea is that as companies get more successful, they’ll move to the main market. But Ritter said that here in U.S., there’s a true competition between exchanges.