February 9, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of NYSE Euronext (NYSE: NYX ) jumped as much as 19% today on a dizzying day of merger news at exchanges.
So what: The London Stock Exchange agreed to buy TMX Group, operator of the Toronto Stock Exchange, for $3.2 billion, and the market was abuzz after that. Speculation that Deutsche Borse AG is in talks to buy NYSE Euronext was confirmed, and after being halted for some time trading resumed at higher prices and a dizzying pace.
Now what: The combination of exchanges makes a lot of sense as trading moves to a more global platform and exchanges fight for customers. NYSE Euronext warned that a merger may not be finalized, but with the London Stock Exchange deal done and this cat out of the bag, my money is on a deal getting finalized. Despite the jump today, I think NYSE Euronext may have further to run and continued consolidation will be good for the industry.
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