To the general public, it's quite a "shocker," says David Weidner at MarketWatch. IntercontinentalExchange (ICE), an upstart derivatives exchange, based in Atlanta, is buying NYSE Euronext, the company that owns the iconic, 220-year-old New York Stock Exchange, in a deal worth more than $8 billion. To long-time market professionals, however, this merger merely confirms something they've known for quite some time. They've been witnessing the slow death of stocks — as the lord of the marketplace — for years, as new regulations and decimalization of trades once done using rounder fractions "effectively squeezed the margins — and the potential for graft — out of the system." Initial public offerings offered healthy profits, but even those have dried up recently, leaving the NYSE and other exchanges "searching the globe for a merger partner," hoping they could buy their way to growth. But the lucrative futures and options exchanges that seemed like natural buyers of the stock exchanges turned up their noses, asking, "Why would we need them?"
There was an exception. The newcomer to the derivatives party, the IntercontinentalExchange (ICE) needed something to vault it into the conversation — even though it not only had profits, but market share and a valuation to rival any exchange in the world.For all of its lackluster financial cosmetics, the NYSE is still the Big Board. It is the venue where the great corporations of the world are listed. The announced deal will have some opportunities for technology sharing and other efficiencies, but mostly its an $8.2 billion deal for a brand.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
-
'Elevating Earth Day into a national holiday is not radical — it's practical'Instant Opinion Opinion, comment and editorials of the day
-
UAW scores historic win in South at VW plantSpeed Read Volkswagen workers in Tennessee have voted to join the United Auto Workers union
-
Today's political cartoons - April 22, 2024Cartoons Monday's cartoons - dystopian laughs, WNBA salaries, and more
