No IPO Yet, But Nasdaq Stock Market Stock Trades Anyway
By: Gaston F. Ceron, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- The Nasdaq Stock Market hasn't held an IPO yet, but its stock began trading anyway. And with a small first-day gain.
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On the Over-the-Counter Bulletin Board, that is. A total of 1300 Nasdaq shares traded there Monday, the first trading day after the expiration of a lockup agreement allowed about 45% of Nasdaq's shares to become eligible for trading. Nasdaq sold stock in private sales completed in 2000 and 2001.
The shares traded at $15, above the $11 and $13 prices at which they were sold to investors in the private stock sales. Nasdaq shares traded on the OTCBB - a quotation service for over the counter securities - under the symbol NDAQ.
A Nasdaq spokesman declined to comment on Monday's stock activity. But in a late June letter, Nasdaq Chairman and Chief Executive Hardwick Simmons told investors that while "one or more" participants in the OTCBB had applied to make a market in Nasdaq shares, Nasdaq "does not intend to participate in or encourage" such trading. Instead, Simmons wrote, Nasdaq prefers to continue working on its business and "hold a public offering or another liquidity providing event for the appropriate time."
Expectations of an IPO were clearly an important reason why many investors, including brokerage firms, bought Nasdaq shares in the 2000 and 2001 private sales of stock. Nasdaq executives have long said that they would like to conduct an IPO, and the private sales were intended to move the market closer to public-company status. As a result, Nasdaq now regularly files financial statements with the Securities and Exchange Commission.
But the timing of an IPO is far from certain - Nasdaq has said it won't happen until the fourth quarter at the earliest - and depends on factors such as market conditions and the success of Nasdaq's planned SuperMontage stock-trading system, due to be launched late this month. The market climate is also much harsher now than when Nasdaq first set out to reorganize itself through an ongoing separation from its traditional parent, the National Association of Securities Dealers.
Without the support that an initial public offering provides for a new stock, it's unclear that a true market will develop for Nasdaq shares on the OTCBB. " I'm getting a lot of calls today," said Frank Ferraro, head trader at Citadel Securities Corp., a Freeport, N.Y. , securities firm and Nasdaq shareholder that registered to make a market in Nasdaq stock. As far as the stock, "I don't think there's enough volume right now to determine where it's going. Time will tell."
Ferraro wouldn't comment on Citadel's role in Monday's trading. But Citadel's parent, Castle Holding Corp. (CHOD), issued a news release late Monday announcing that Citadel "has initiated trading in shares of the Nasdaq Stock Market."
"Nasdaq is a very good company and there does not seem to be any reason why investors should have to wait any further to benefit from having liquidity in their investment," said George Hebert, Castle Holding's president, in the release. "Its first day of trading saw very little activity, probably because of the lack of publicity that Nasdaq's shares are trading." |
