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NASDAQ bows out of bid for NYSE, clearing way for Deutsche Boerse

Mitchell Hartman May 16, 2011
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NASDAQ bows out of bid for NYSE, clearing way for Deutsche Boerse

Mitchell Hartman May 16, 2011
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JEREMY HOBSON: Now to the stock market bidding war that was, and is no more. The computerized exchange NASDAQ will not try to take over the New York Stock Exchange. NASDAQ’s CEO said this morning that U.S. anti-trust regulators would have blocked a merger between the two biggest American exchanges.

Marketplace’s Mitchell Hartman has more.


MITCHELL HARTMAN: With NASDAQ and its partner, IntercontinentalExchange, throwing in the towel, the way is clear for Germany’s Deutsche Boerse to seek regulatory approval to take over the New York Stock Exchange in a friendly $10-billion-dollar deal.

That would mean majority foreign ownership of a venerated American financial institution founded in 1792 under a Buttonwood tree in lower Manhattan. Management consultant Peter Cohan says the exchange is showing its age.

Peter Cohan: The New York Stock Exchange has these things called specialists — which are actually human beings that match up buyers and sellers. But it’s sort of an artifact of a previous technological era when people didn’t have computers to trade stocks and had telephones. But that’s been going away for the last 30 to 35 years.

Cohan says the big money today is in computerized futures trading-things like interest rate and foreign currency swaps — where profit margins top 50 percent. Having lost out on the NYSE, analysts expect NASDAQ to continue looking for other exchanges to buy around the world.

I’m Mitchell Hartman for Marketplace.

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