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Kai Ryssdal: Oh, believe me when I tell you you’re not the only person who’s had enough of market stories. But we’ve got a brand new one for you today. Not just a new story, but a new market.
Nasdaq’s launching the Portal Market tomorrow. About 500 companies will be listed. But before you rush out to make your first trades, Marketplace’s Amy Scott has a couple of caveats.
Amy Scott: First of all, you’ll need at least $100 million in assets to trade on the new Nasdaq market. And the companies listed are privately-held. That means they don’t have to tell the public what they’re up to.
Analyst Brad Bailey follows the stock exchange business for research firm Aite Group. He says for years, investors who wanted to buy a piece of a private company had to pick up the phone and negotiate a price. Now, members will be able to log onto a website, check the stock price and make a trade at the click of a mouse.
Brad Bailey: This continues the evolution of the markets overall in the U.S., where we’re going from a voice-based market where people are calling on the phone to more electronic tools. It should add some form of transparency to this market.
Some analysts say the reverse is happening. More companies are going private, in part to avoid regulations like the Sarbanes-Oxley reforms. Last year, companies raised more money by selling shares privately than on the public market.
But analyst Stephen Bruel with research firm TowerGroup says a private listing is often a prelude to going public.
Stephen Bruel: If companies stay private, then I think you could see some potential issues down the road — especially the lack of retail access to these investment opportunities. But often times, the companies that are listing on the private markets will go public down the road.
Nasdaq’s private exchange will have some competition. Earlier this year, Goldman Sachs launched a platform for trading unregistered shares. Next month, a group of five investment banks, including Merrill Lynch and Citigroup, plans to roll out its own private market.
In New York, I’m Amy Scott for Marketplace.
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