Comments on: Nasdaq’s clever stupid bid for NYSE A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: bxg12 Tue, 05 Apr 2011 02:28:40 +0000 You need to US Equities exchanges from other businesses.

Maybe the former are truly becoming “large, low-margin utilities” but if you are going to be the leader in such, is it bad? As a hypothetical shareholder, why is this so obviously, unacceptably, worse than having the CEO undertake (your words) “bad mergers”. It’s not _me_ that gets invited to White House dinners after all – the glamor does not pay my retirement – so why do I care? US equity exchanges may or may not be an interesting business, a profitable business, but if things turn out well it’s clearly NASDAQ in the lead at this point. Why is it rational for a shareholder to ask NASDAQ to risk it all for (media?) prominence in other areas?

With respect to the “world of giants” claim: NYSE is dying in the equities business and it’s unclear how that could change. To fix NYSE would be to gut it from to bottom while somehow retaining – its only live equity-related asset – the brand equity and its consequent listings … but this would be hugely expensive. You comment around the status of the NYSE trading floor shows you have some recognition of this. And there are no other likely U.S. equity exchange giants beyond this zombie and NASDAQ. Yay, competition! :-)

By: bxg12 Tue, 05 Apr 2011 01:53:30 +0000 > Even a bad merger with the NYSE is better than being left out in the cold, a small, low-margin, marginalized exchange in a world of giants.

First, from whose perspective? I’d rather have a modest stake in an efficient low-margin company that leads its (low-margin) industry than be massively diluted as it undertakes “bad” mergers in order to keep in the news. If I were a shareholder, my welfare would not so that tied up in how prominent the CEO is in White House gatherings. Or do you mean something else?

Second, though I know you are trying to speak more broadly, if there is any giant in U.S. Equity exchanges in our future (which I doubt) it has to be NASDAQ. Anyone trying to rehabilitate NYSE, and stop it from doing any more than coast on past glory and slowly die, has to gut it from top to bottom. Your comments about the trading floor show some recognition of this, but overall I doubt you recognize how great the challenge is. A purchaser of NYSE has to try to maximize profit and slow the decline of its franchise value, while simultaneously trying to bring efficiency within an order of magnitude of a BATS or such … that’s a tall order. IMO the constraints are so large you have more chance of success building up from from something sensible (be it NASDAQ, or even tabula rasa) than trying to reform expensive chaos.

By: KenG_CA Mon, 04 Apr 2011 21:10:46 +0000 What makes you so sure that ATT will be allowed to buy T-Mobile? Is it because you think Obama is afraid of being labeled anti-business for opposing a merger that would be good for only two businesses (ATT and DT), while being bad for their business and consumer customers, and their equipment partners?

There is no justification for allowing this acquisition, and if it does happen, there could be no reason to oppose any other merger under anti-trust laws, and the FCC might as well be abolished if they won’t protect the public asset that is wireless spectrum.