Sorry if this is a repeat...now we can own stock *of* the Naz itself.......hmmmmm so how would those puts work....LOL
Nasdaq says to become publicly traded
company
(UPDATE: Adds academic's comments, paragraphs 16-20)
By Mark Weinraub
NEW YORK, April 26 (Reuters) - The Nasdaq said on Thursday it plans to
become a publicly traded company, a long-awaited move that would give the No. 2 U.S. stock market a
nimble ownership structure and the opportunity to raise cash for expansion.
``Offering shares to the public is a natural next step in the
evolution of Nasdaq,'' Nasdaq Chairman Frank Zarb said in a
statement. ``When the time is right, we will do it. The result
will be a Nasdaq with more resources, better able to compete,
and improve its market for investors and companies around the
globe.''
The timing will depend on a variety of factors, including
recognition by the Securities and Exchange Commission that
the Nasdaq meets its requirements for exchange status,
progress on technology and market conditions. Zarb said
Nasdaq's board will discuss the exact timing in the fall.
The Nasdaq, one of the symbols of growth and technology in the 1990s, has lost some of its luster in the
past year as its composite index has slumped by about 60 percent.
The size of the float, which will make Nasdaq the first publicly traded U.S. stock market, had not been
decided but officials said they would like to see the widest possible distribution of the shares.
``It's not going to be driven by any predetermined notion about how much the company should retain,''
Zarb said in a conference call with reporters.
Thursday's announcement further distinguishes the Nasdaq from the rival New York Stock Exchange, the
world's largest equity market, which is owned by its members.
``Currently, the New York Stock Exchange has no plans for an initial public offering,'' an NYSE
spokeswoman said.
The NYSE's current member-owned structure allows it to tackle projects -- such as fortifying its systems
to handle trading volumes that have never been reached before -- which would be hard to justify to
shareholders of a public company, NYSE chairman Richard Grasso has said.
Zarb declined to give a total market value of Nasdaq but the NASD recently sold 10 percent of the market
to private equity firm Hellman & Friedman LLC for $240 million, a deal that would value Nasdaq's at
around $2.4 billion. The Hellman & Friedman deal, announced a month ago, gives the firm debentures
that are convertible into Nasdaq stock.
Nasdaq, which is already reaping profits from its operations, has not decided on an investment bank to
manage the
Ipo.
SUCCESS OVERSEAS
A stock market IPO, while revolutionary in the United States, has proved successful overseas. Germany's
Deutsche Boerse recently offered up its shares to the investing public in a move expected to raise $926.5
million. The Stockholm stock exchange saw significant reductions in trading costs following a public
offering by its operator, Sweden's OM Gruppen.
Nasdaq has studied all of Europe's exchange IPOs and is also monitoring the actions of the London Stock
Exchange, which is expected to go public later this year, Zarb said.
``I think it will give them access to capital, which they need,'' said Tony Cecin, head of equity trading at
U.S. Bancorp Piper Jaffray. ``And it creates a public currency for them to pursue acquisitions.''
But the change would not really be noticed in the day-to-day workings of Nasdaq's traders, Cecin said.
Randall Kroszner, professor of economics at the Graduate School of Business at the University of
Chicago, said, ``In terms of the ownership structure of finanancial markets, this is the tip of the iceberg.
We will see a lot of the markets go public.''
The timing of the Nasdaq announcement, he said, was likely driven in part by the end of the activist
tenure of former SEC Chairman Arthur Levitt.
Among the changes during Levitt's eight years as chairman, the longest of any SEC chief when he stepped
down in Feburary, were decimalization of U.S. stock prices and rules requiring companies to disclose
market-sensitive data to the public and Wall Street professionals at the same time.
``The writing has been on the Wall for a while that these markets are thinking about changing their
structure,'' Kroszner said. ``I think some of the timing has to do with the change in Washington. There
was deep concern about Arthur Levitt.''
While Levitt's successor has not been named, he said the successor likely will be less of a regulatory
activist than Levitt.
The New York-based Nasdaq has raised $516 million through a series of private placements in the past
year as part of its plan to fully separate itself from the National Association of Securities Dealers and
transform itself into a for-profit exchange. The placements, which have cut the NASD's ownership to
about 10 percent, were viewed as the first step toward an IPO but the timing of the plan was unknown.
The Nasdaq also recently inked a deal to buy a majority stake in pan-European bourse Easdaq for about
$12.6 million in a move to establish cross-border trading. In addition to expansion, the Nasdaq must also
spend money on computer improvements for implementation of its new SuperMontage trading system,
which was approved after lengthy negotiations with regulators and competitors.
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