Mike Manning presentation at Tradestreaming Money Conference on November 14th

1. Fidelity Capital Markets
IPO Market and Innovation Update
November, 2016
778328.1.1

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S&P
Number of IPOs
Number of IPOs S&P
2
IPO Market Analysis (1980-2016)
IPO market is cyclical driven by overall economic, regulatory, and equity market conditions
Market Crash
Financial Crisis
Sarbox
TMT Bubble
2 Source: iPreo, Bloomberg, Fidelity Capital Markets Unaudited Data as of 10/24/2016
JOBS Act

3. Sector # of Deals Volume ($M) 1 Day Perf
2016 YTD
Perf
Consumer 10 $3,284 9% 18%
Energy 4 $285 11% 28%
Financials 10 $3,089 6% 26%
Healthcare 34 $3,345 10% 31%
Industrials 3 $870 1% 8%
Materials 1 $759 5% -3%
Technology 15 $2,367 40% 62%
Utilities 3 $204 1% 15%
Total 80 $14,203 10% 23%
• Enacted 2012, Positive Impact on IPOs
• Investor Threshold (2,000)
• Emerging Growth Companies (EGCs)
• Streamlined IPO Process
IPO Market Update (2016)
US JOBS Act IPO Themes
Source: iPreo, Bloomberg, Fidelity Capital Markets Unaudited Data as of 10/24/20163
Select 2016 IPOs IPO Sector Performance (2016 ytd)
Issuer Sector
Deal Size
($M)
2016 YTD
Perf.
MGM Growth Properties LLC Financials $1,207.50 +21%
Patheon NV Healthcare $718.75 +31%
AdvancePierre Foods Holdings Consumer $449.19 +29%
Bats Global Markets, Inc. Fin Tech $290.61 +56%
Nutanix, Inc. Technology $237.92 +82%
Cotiviti Holdings, Inc. Healthcare $237.50 +74%
Twilio, Inc. Technology $172.50 +157%
Coupa Software, Inc. Technology $153.18 +50%
Acacia Communications, Inc. Technology $119.03 +276%
The Trade Desk, Inc. Fin Tech $96.60 +60%
• Equity Market Continues to Outperform
• 2016 IPO Market Rebound, 2017 Pipeline
• IPOs = Alpha
• Alternative Capital Formation Platforms

4. Fidelity Innovation: Online Directed Share Programs (DSP)
• Alignment of Employees and New Public Shareholders
• Positive Signal to Market
• Provides Additional IPO Demand Volume
Rationale: Directed Share Programs
Issuer
IPO Size
($M)
Total DSP
Size ($M)
DSP % of
Deal
Fid.com
DSP
Accts BR
$10,620 $1,000 10.0% 140,000 GS
$8,680 $150 2.0% 81,000 CS
$1,001 $57 5.7% 12,000 MS/CS
$251 $12.5 5.0% 3,500 CS
$784 $27 4.0% 2,200 CITI
$665 $23.7 3.7% 1,500 GS/CS
$82 $18.3 22.4% 525 SAND/ST
$714 $29.9 4.2% 250 BARC/CS
$351 $1.3 0.3% 125 JEFF
$54 $0.3 0.5% 110 COW
$92 $2.1 2.3% 100 LEER
$60 $1.7 2.7% 75 LEER
$60 $1.4 2.3% 75 BMO
$186 $0.3 0.2% 70 CS
$38 $1.6 4.3% 60 CS
$65 $1.8 2.8% 55 CAN
Total: $1.3B 7.1% 241,620 -
Source: Bloomberg and Fidelity Capital Markets Unaudited Data as of October 12, 2016.
Fidelity Retail Ownership includes Fidelity.com, Fidelity Clearing and Custody Solutions.
Does not include FMR Co Asset Management or other Fidelity equity investments.
Select Fidelity Managed Directed Share ProgramsInnovation: Online Directed Share Programs
• Employees, Board, Customers and Key Relationships
• Historically 5% of IPO Size, Manual Process
• Proprietary Fidelity Online DSP Platform
• Participant Communication, Account Opening,
Bookbuilding, Allocation
Account Opening Landing Page
Indication of InterestAllocation/Payment
TRANSUNION
TransUnion DSP

5. Alternative Capital Formation
Pre-IPO Investing / Venture Exchanges
• Pre-IPO Investing by Institutional Investors
• Pre-IPO Companies to Stay Private Longer
• Estimated 100+ $1B Unicorns
Ø OfferUp
Ø Pinterest
Ø SpaceX
Ø Palantir
Ø Actifio
Ø Cloudera
Ø Snap, Inc.
Ø Airbnb
Ø Dropbox
Ø Lyft
Ø MongoDB Ø WeWork
Ø SoFi
Ø Uber
Ø DocuSign Ø Stripe
Online Marketplace Platforms
• Social Finance (SoFi):is an online personal finance company
that provides student loan refinancing, mortgages and personal loans.
The company is also branching into other financial services, with a
wealth management tool in beta.
• OnDeck Capital: provides small business financing by utilizing
proprietary OnDeck Score technology to approve loans
• LendingClub: hosts an online financial community that brings
together credit worthy borrowers and independent investors that
provide financing at more attractive rates than traditional banks
• Other Platforms: AngelList, CircleBack, CircleUp, Kickstarter,
Prosper, Peerform, Invested.In
• FIX Trading Community: Industry Forum for Trading
Ø Financial services sector participation
Ø Advocate for electronic IPO messaging platform
• Dealogic Connect (UK): Electronic IPO Platform
Ø UK regulatory initiative to improve IPO efficiency
Ø Several UK IPOs with electronic IOI and allocation functionality
Electronic IPOs
• For 1990-2016, US IPO Fees Remain at 6.5% - 7%
Ø IPOs historically a manual process
• WR Hambrecht + Co. Created Open-IPO
Ø Online IPO bookbuilding/allocation model (limited traction)
In the most well-publicized
electronic auction to date,
Google offers $1.9B IPO
auction offering
Largest pure electronic auction
ever conducted, the Interactive
Brokers offering doubles,
raising $1.2B
2004 2007
Hybrid online/traditional IPO
managed by WRH raising
$76M as best efforts offering
2015
IPO Evolution: FIX Trading and Dealogic Connect

6. 6
Fidelity Capital Markets: Key Takeaways
• IPO Market Recovery to Accelerate
• IPO Reform to Reinforce Market Growth
• Proliferation of Innovative Electronic Capital Formation Platforms

7. 7
Disclosures
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