- Mississippi abortion law can’t be enforced
- Teacher who survived Sandy Hook has book deal
- Jury awards Jesse Ventura $1.8M in case vs. ‘American Sniper’ author Chris Kyle
- Government OKs Arab-owned company to operate U.S. cargo port
- Defense lawyer: McDonnell’s wife had ‘crush’ on CEO
- Chinese hackers stole ‘huge quantities’ of sensitive data on Israel’s Iron Dome
- House unveils bill to speed deportations of illegal immigrant children
- Californians protest middle school for hiring white man to teach cultural studies
- Killer’s sentencing overturned because mother couldn’t find seat in courtroom
- Hillary: ‘Dead broke’ comment was ‘inartful,’ but insists it was ‘accurate’
NYSE being sold to Atlanta firm for $8 billion
Question of the Day
The Big Board just isn’t so big anymore.
In a deal that highlights the dwindling stature of what was once a centerpiece of capitalism, the New York Stock Exchange is being sold to a little-known rival for $8 billion — $3 billion less than it would have fetched in a proposed takeover just last year.
The buyer is Intercontinental Exchange, a 12-year-old firm headquartered in Atlanta that deals in investing contracts known as futures.
Intercontinental Exchange, known as ICE, said Thursday that little would change for the trading floor at the intersection of Wall and Broad streets, in Manhattan’s financial district. But the clout of the two-centuries-old NYSE has gradually been eroded over decades by the relentless advance of technology and regulatory changes. Its importance today is mostly symbolic.
The NYSE dates to 1792, when 24 brokers and merchants traded stocks under a buttonwood tree on Wall Street. But today most trading doesn’t require face-to-face meeting at all. It’s done on computers that match thousands of orders a second.
Three decades ago, the floor of the New York exchange was full of bustling traders. Today, one of its largest booths belongs to the cable news channel CNBC, which broadcasts there for most of the business day.
The introduction of negotiated, rather than fixed, commissions for securities transactions, in May 1975 marked the start of a gradual decline in brokerage fees for traditional stock trading.
It also gave rise to so-called discount brokerages, like Charles Schwab, that offered to trade for customers at lower rates.
“The cash equities business in America has effectively been obliterated,” said Thomas Caldwell, chairman of Caldwell Securities in Toronto and a shareholder in the New York exchange’s parent company, NYSE Euronext.
NYSE Euronext was formed in a 2007 merger when NYSE Group, parent company of the exchange, got together with Euronext, which owned stock exchanges in Europe.
It has been looking for a partner. Last year, ICE and Nasdaq OMX Group Inc., which competes with the NYSE for stock listings, made an $11 billion bid to buy NYSE Euronext. But that deal fell apart after regulators raised antitrust concerns.
Deutsche Boerse AG, a German company, made a bid for NYSE Euronext, but that was scuttled by European regulators.
ICE was established in May 2000. Its founding shareholders represented some of the world’s largest energy companies and financial institutions, according to the company’s most recent annual report.
Analysts forecast that ICE’s revenue will reach $1.4 billion this year, more than double the $574 million it reported in 2007.
Peter Costa, president of Empire Executions Inc., a boutique trading firm on the floor of the NYSE, and a governor with the New York Stock Exchange, said that both companies knew the value of the NYSE brand and would try to preserve it.
TWT Video Picks
- Boehner rules out impeachment: 'Scam started by Democrats'
- Obama: 'Not a new Cold War,' but new Russia sanctions announced
- Federal judge grants 90-day stay in D.C. gun case
- Obama thanks Muslims for 'building the very fabric of our nation'
- GOP Senate candidate: Obama needs to visit Central America
- Smugglers, rainstorm combine to poke holes in border fence
- Murdered teen texted boyfriend: 'OMG ... I think I'm being kidnapped'
- D.C. seeks to stay judge's order allowing gun owners to carry in public
- Kerry's credibility questioned as fighting in Gaza rages
- Jury awards Jesse Ventura $1.8M in defamation case
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world