To: Pullin-GS who wrote (13688 ) 3/11/1998 10:21:00 PM From: Moonray Respond to of 22053
NASDAQ, American Stock exchange eye merger New York Times - Posted at 6:34 p.m. PST Wednesday, March 11, 1998 NEW YORK -- The American Stock Exchange and the National Association of Securities Dealers are discussing a combination that would give them enough heft to seriously challenge the giant New York Stock Exchange, according to several people close to the talks. The image of the NASD, which governs the Nasdaq stock market, has been tarnished in recent years by allegations of price fixing, while the American Stock Exchange has become a distant third in U.S. stock trading. Details about the structure of combination were sketchy Wednesday night, in part because they were still being worked out and exchange members had not been fully informed. People close to the talks said the NASD would create a holding company under which the Amex and the Nasdaq would continue to operate separately as subsidiaries. Nasdaq is an electronic exchange, with broker-dealers posting on computers the prices at which they are willing to trade. The New York Stock Exchange and the Amex are auction markets, where prices are arrived at through ''open outcry'' trading at a certain spot on a central trading floor. Under the proposal, companies would have the choice of where their stocks would be listed. Nasdaq, which has superior technology and larger trading volume, is home to some of the nation's fastest growing high technology companies and has attracted a following among speculative investors who have profited handsomely from the explosive gains of such stocks in recent years. But it has had trouble attracting international companies, which are more familiar with the open-outcry system used by the Amex. Amex, which has struggled to attract new listings and to increase its trading volume, would benefit from Nasdaq's technological edge without having to spend money to build its own upgraded systems. If the move is approved, it could ultimately lead to a meshing of the two marketplaces with Nasdaq's electronic trading taking the place of much of the trading activity on the floor. Not only are the trading systems different, but so are the cultures. Obstacles to the merger would include winning approval of memberships of both organizations, a task that will most likely come down to persuading Wall Street that the gains will go to the bottom line. ''Wall Street pays for all three markets, so why have the redundancy?'' asked one person who was briefed on the developing talks. ''Over all, you get the cost structure down.'' That, he continued, could mean savings for investors as well. I have followed Juniper some the last 6 months. Always good to have another piece of the puzzle. Thanx. o~~~ O