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Nyse + Aracex = Obfex!
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bump?gotmilk said:
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Spartacus
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no I was interested in some brief background infogotmilk said:Karma thread?
The New York Stock Exchange says it will merge with electronic trader Archipelago Holdings in a deal designed to preserve the competitiveness of the venerable market.4everhung said:
BY MICHAEL J. MARTINEZ
Associated Press
NEW YORK - The 213-year-old New York Stock Exchange vaulted into the top ranks of electronic stock trading Wednesday, announcing a merger with all-electronic rival Archipelago Holdings in a stunning move that will also transform the NYSE into a for-profit, publicly traded enterprise.
The deal answers one of the pressing needs facing the NYSE, which has battled increasing competition from faster all-electronic exchanges like the Nasdaq Stock Market as well as Archipelago. The NYSE conducts its transactions through a specialist auction system, in which trades are made through people on its selling floor.
The NYSE's 1,366 seat holders, its current owners, will receive $400 million in cash and 70 percent of the shares in the new company, while Archipelago's shareholders will retain 30 percent of the shares, NYSE Chief Executive John Thain said at a news conference.
''The NYSE had to go in this direction,'' Caldwell Securities Chief Executive Brendan Caldwell, whose family owns one seat on the exchange and controls 12 more, told Bloomberg News. ``This will give the exchange a new vibrance, new energy and new purpose. It will help rid the NYSE of all the insularity that came with being a not-for-profit.''
NYSE seat prices have dropped by almost 40 percent in the past six years.
COMPANY VALUES
Using the NYSE's latest seat sale -- $1.62 million -- as a guide, the NYSE is roughly valued at $2.2 billion. Archipelago is valued at $844 million using Friday's closing stock price.
The new entity, a holding company to be called NYSE Group, will spin off the NYSE's regulatory arm -- recently invigorated after coming under intense criticism for failing to stem a floor-trading scandal -- into a not-for-profit oversight entity. That part of the deal answers the demands of some NYSE members who have been agitating for the exchange to turn for-profit in order to better compete as a business.
''I think the regulatory structure we're proposing will be a model for other self-regulating agencies,'' Thain said.
ArcaEx Chairman and Chief Executive Jerry Putnam said the merger would create opportunities for NYSE Group to expand its trading into other areas, including options and other equity derivatives. The exchange will not trade Nasdaq-listed stocks on the floor of the NYSE but will continue to trade them through ArcaEx's electronic market. The NYSE also will continue its plan to create a hybrid market, combining its floor trading with an enhanced electronic system under development.
ABILITY TO COMPETE
The merger also improves the NYSE's ability to compete following the Securities and Exchange Commission's approval earlier this month of Regulation National Market System. The regulation requires stock traders to accept the best bid or offer available, no matter which stock exchange or market posted it -- but customers could go to another market if they want to complete trades as quickly as possible. This option makes the pre-merger NYSE less competitive.
SEC Chairman William Donaldson, a former head of the NYSE, said the announcement underlines the industry's competitive pressure.
''It's illustrative of the intense competition growing now between the various marketplaces,'' Donaldson told the Bond Market Association in New York. ``It illustrates vividly the importance of the level playing field we've tried to put in place.''
MANAGEMENT
Thain will remain CEO of NYSE Group, while Putnam will become president and co-chief operating officer. The management teams of the two companies will be integrated, Thain said, and a transition team is already working on the deal.
NYSE Chief Financial Officer Amy Butte will become executive vice president of strategy and product development, while Archipelago CFO Nelson Chai will assume that role for the NYSE Group.
Pending regulatory approval, the merger is expected to be completed in either the fourth quarter of this year or the first quarter of 2006, Thain said. Three ArcaEx board members will join the NYSE board.
ICONIC LOCATION
The company will continue to be headquartered at its iconic Wall Street building in New York.
The deal is a major coup for Thain and a boost for a stock exchange that in recent years has been most notable for the controversy over the $187.5 million pay package given former Chairman and CEO Richard Grasso. Thain became CEO in early 2004, several months after Grasso's forced resignation.
Shares of Archipelago surged 11 percent, or $1.86, to $18.76 on the Pacific Stock Exchange, a regional exchange affiliated with Archipelago, before trading was halted due to pending news. Shares have traded in a 52-week range between $11.50 and $22.90.
pitbullstl
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bran987 said:I own stock in Archipelago (AX)happy day for bran yesterday (+60%).
I think it's a great merger
Yes, good day indeed.
