Thursday March 12, 7:45 pm Eastern Time
If Nasdaz and American mergered - What would that do to price of FAMH
New to the thread.
FOCUS-Amex-Nasdaq talk, details sketchy
NEW YORK, March 12 (Reuters) - Wall Street was scrambling Thursday to
find out how the American Stock Exchange ''open outcry'' system of
trading would be merged into the electronic floor-less Nasdaq trading
system after the surprise news that the two were talking merger.
After word of the talks between the Amex and Nasdaq hit morning
newspapers, a source familiar with the situation characterized the
current status as a ''preliminary proposal'' that was not far enough
long to be considered a tentative agreement.
As people left the Amex in lower Manhattan at the end of the workday,
many were on edge. Equity traders appeared to be the most concerned.
Robert Grundstein, an options trader with Liberty Capital, told a
reporter as he departed the Amex that equities traders would have more
reason to be anxious.
''Nasdaq is a computer-oriented behemoth,'' Grundstein said. ''It's a
lot cheaper to have technology rather than people. I am not terrified
but there is anxiety.''
The biggest question mark was how options trading, the most vibrant part
of Amex, would fit in with Nasdaq. Some traders thought it might be left
as a separate unit or combined with the options trading that is part of
the Philadelphia Stock Exchange.
''These are two very dissimilar systems,'' said Douglas Meyer, vice
president of equity trading at broker Interstate/Johnson Lane, referring
to the general idea of an Amex-Nasdaq combination. ''I would think they
will have to keep the two systems separate for a while because you have
an auction system on Amex and negotiated computer trading on Nasdaq.''
Early reaction was generally that a merger would be good for both Nasdaq
and the Amex, helping the Amex reverse slippage in its listed equity
business and helping Nasdaq move to new trading systems what would
better serve both small investors and big institutional traders.
But some concern also cropped up that perhaps the Amex would not be able
to muster a vote for the plan.
In order for Amex to approve the merger, a favorable vote will be needed
from two-thirds of the 864 members owning seats.
A source said the quoted prices for seats on the Amex, most recently
changing hands at $480,000, were likely to go through the roof with
everting on hold until people knew exactly what was going on.
Amex chairman and chief executive Richard Syron and president and chief
operating officer Tom Ryan briefed members at the end of the day on the
talks, saying there was much work to be done, according to the source
familiar with the situation. The source said the Amex board also met but
did not vote on anything.
Some people spoke out criticizing the plan. Alan Davidson, president of
Zeus Securities in Jericho, N.Y. and president of the Independent Broker
Dealer Association called the possible merger downright anti-competitive
and said the IBDA would take further action.
''We are opposed to the merger because we consider it to be
anti-competitive,'' Davidson said. ''The NASD (National Association of
Securities Dealers, Nasdaq parent) has a monopoly already and this seems
to be feeding the monster.
The New York Stock Exchange, noting that its customers are different
from Nasdaq and Amex customers, said in a statement that it viewed the
talks as a ''positive step.''
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