INSIGHTS
DEC
20
THIS TIME IT WILL WORK...
Normally, I don’t write or comment about individual events that happen during the week. I leave those events for the Insights column on Monday. Give the events time to percolate and reach a boil. Time passing is always the most effective way to digest a news event.
The pending “Merger” between the Intercontinental Exchange (ICE) and the NYSE Euronext (NYX) warrants such comment.
Being a shareholder and a member of the NYSE Euronext for over 20 years I feel I have a fairly good understanding of the business and its importance in the fabric of the US economy.
When the NYSE Euronext had announced its proposed merger with the Deustche Boerse last year, I was adamantly opposed to it. The terms of the deal left too many questions about the nature of equity trading and the NYSE trading floor. The deal broke up not because of that, but because of European concerns about the concentration of the derivatives market in Europe. So that left the NYSE Euronext free to explore other options. Proposed takeovers and mergers came and went until finally today’s deal was worked out.
The terms of the deal considering today’s environment are fairly generous and I have no problem with the structure.
As someone who has spent his whole adult life working in one unique place, the initial fear is that even after all of the monumental changes we finally might have come to an end of an era.
The trading floor, while very valuable as a marketing tool, may seem to have let the world pass it by. Electronic trading of equities has gravitated away from the NYSE trading floor to a much faster, seemingly more efficient trading arena. Computer’s now guide 80% or more of the trading in US equities and era of price disclosure, price betterment has gone away.
However, the trading floor has survived because the customers of the NYSE still see value in the hybrid model that the NYSE has developed. They can get speed and some insight into the execution of those equity orders. They can get transparency still without having to sacrifice cost efficiencies. They can be involved and know that the NYSE has in place, more trading safeguards than any other exchange on the planet.
Ok, so I am biased towards the model I have lived with for 31 years but I am not naïve’ and I do know that economic conditions justify some change and this merger, I feel will allow the NYSE the ability to continue to effect that change.
The management of the NYSE has done an incredible job of building a brand, building a new business, while still maintaining the characteristics of what made the NYSE great.
The new organization understands the importance of the NYSE trading floor, it’s value to the companies that list here and the potential for new listed companies in the future.
Continuing to combine the technology of ICE and the marketing muscle and human muscle of the NYSE is a positive and I look forward to participating in the future growth of this new company.
The pending “Merger” between the Intercontinental Exchange (ICE) and the NYSE Euronext (NYX) warrants such comment.
Being a shareholder and a member of the NYSE Euronext for over 20 years I feel I have a fairly good understanding of the business and its importance in the fabric of the US economy.
When the NYSE Euronext had announced its proposed merger with the Deustche Boerse last year, I was adamantly opposed to it. The terms of the deal left too many questions about the nature of equity trading and the NYSE trading floor. The deal broke up not because of that, but because of European concerns about the concentration of the derivatives market in Europe. So that left the NYSE Euronext free to explore other options. Proposed takeovers and mergers came and went until finally today’s deal was worked out.
The terms of the deal considering today’s environment are fairly generous and I have no problem with the structure.
As someone who has spent his whole adult life working in one unique place, the initial fear is that even after all of the monumental changes we finally might have come to an end of an era.
The trading floor, while very valuable as a marketing tool, may seem to have let the world pass it by. Electronic trading of equities has gravitated away from the NYSE trading floor to a much faster, seemingly more efficient trading arena. Computer’s now guide 80% or more of the trading in US equities and era of price disclosure, price betterment has gone away.
However, the trading floor has survived because the customers of the NYSE still see value in the hybrid model that the NYSE has developed. They can get speed and some insight into the execution of those equity orders. They can get transparency still without having to sacrifice cost efficiencies. They can be involved and know that the NYSE has in place, more trading safeguards than any other exchange on the planet.
Ok, so I am biased towards the model I have lived with for 31 years but I am not naïve’ and I do know that economic conditions justify some change and this merger, I feel will allow the NYSE the ability to continue to effect that change.
The management of the NYSE has done an incredible job of building a brand, building a new business, while still maintaining the characteristics of what made the NYSE great.
The new organization understands the importance of the NYSE trading floor, it’s value to the companies that list here and the potential for new listed companies in the future.
Continuing to combine the technology of ICE and the marketing muscle and human muscle of the NYSE is a positive and I look forward to participating in the future growth of this new company.