Check out the article in today's WSJ. Says essentially the same thing as this piece from Reuters:
Nasdaq shares available to trade, but no action
Reuters, 07.01.02, 11:37 AM ET
By Nicole Maestri
forbes.com
NEW YORK, July 1 (Reuters) - There were no trades of Nasdaq Stock Market shares on Monday morning after 45 percent of the No. 2 U.S. stock exchange's outstanding shares became eligible for sale.
"I'm not seeing much right now," said Frank Ferraro, head of trading at Citadel Securities Corp., watching interest in shares six minutes before the opening bell. "I'm the only dealer right now."
The lack of interest was likely due to the fact that many investors were unaware that shares are open to trade, Ferraro said.
Indeed, nearly one hour after the opening bell, no trades had been completed.
"I'm getting a lot of calls from a lot of small broker- dealers that have 500 shares, 1,000 shares," Ferraro said. "I don't have anything firm."
The Nasdaq has long planned to hold an initial public offering, which it has said would not take place before the fourth quarter of this year and would depend on market conditions.
But market conditions have been less than favorable. The Nasdaq's composite index, a barometer of the strength of the technology market, is down roughly 25 percent year to date. The bear market that pummeled technology shares also forced many companies to be delisted from the Nasdaq, thereby shrinking the market's revenue pool.
Monday, investors who bought shares in two private placements in 2000 and 2001 became eligible to sell a portion on the Over-The-Counter Bulletin Board, giving them a chance to divest their investment before an initial public offering.
The sale was not being encouraged by the exchange.
"Nasdaq does not intend to participate in, or encourage these Bulletin Board activities and will not participate in other activities generally associated with underwritten public offerings at this time," wrote Hardwick Simmons, chairman and CEO, in a letter to shareholders in June.
"It is not clear that a market will develop for our common stock, or whether that market will reflect the true market value of Nasdaq's common stock."
If trading does take place, it will give the Nasdaq an idea of whether it could price its shares near the $11 or $13 range at which they were sold during the private placements.
Nasdaq spokeswoman Bethany Sherman said having shares available for trade does not change the Nasdaq's IPO plans.
"It certainly takes away some of the punch and the excitement from the IPO," said Kyle Huske, an analyst at research firm IPO.com, referring to shares being available for trade.
Given market conditions, Huske does not expect the Nasdaq to proceed with its IPO any time soon.
"The Nasdaq just performed horribly this year and we're not expecting to see the broader market improve until late in the year," Huske said. "If they don't need the money in the immediate sense, they're probably better off waiting for a more favorable environment."
Copyright 2002, Reuters News Service |
