Archipelago Seeks IPOs, Market Share
Sun Dec 15,12:22 PM ET
By Nicole Maestri
NEW YORK (Reuters) - Want to hold an initial public offering?
Well, how about bypassing the New York Stock Exchange (news - web sites) or the NASDAQ Stock Market and heading to the Archipelago Exchange?
The idea may sound somewhat suspect, especially following the outbreak of corporate scandals that have investors worried about corporate governance at listed companies, but Archipelago Holdings LLC wants it to be a reality in the future.
"We'd love to be a venue for initial public offerings for companies of all sizes," said David Strandberg, director of issuer services for Archipelago, who joined the exchange from NASDAQ Stock Market Inc (OTC BB:NDAQ.OB - news).
The push is part of Archipelago's aggressive move to be an accepted player in the big leagues. Started as an electronic share trading network in 1997, and now also a stock exchange, Archipelago is aiming to take market share from the likes of the NYSE and the American Stock Exchange and eventually emerge as a major national market.
But as the new exchange on the block, the privately held Chicago-based firm has a tough row to hoe.
"They're up against some very, very good competitors and it's going to be very, very hard for them to grab any additional market share," said James Angel, associate finance professor at Georgetown University.
OLD GOAL, NEW TACTICS
Archipelago is not alone in ogling listed market share, especially the NYSE's share. Having gained roughly a 50 percent share in trading NASDAQ stocks, electronic communications networks, or ECNs, like Archipelago have hungrily eyed the NYSE's roughly 83 percent share of all trading in the stocks it lists.
But Archipelago has a unique structure that it hopes will help bump up its 3 percent share in trading of stocks listed on exchanges. First, it runs a "routing" ECN that links buyers and sellers of stock in its system or by routing them to other networks or exchanges if it cannot complete the trade. It is the No. 2 ECN following its merger with Redibook ECN. |
