How do you celebrate when a 213-year-old trading exchange finally decides to go public as a for-profit institution? Ring an opening bell, perhaps? Tuesday night, the historic New York Stock Exchange agreed to its planned merger with Archipelago Holdings
While there were rumblings from dissident shareholders, the final vote wasn't even close. Ninety percent of the 1,366 seat-holders cast their votes, and 95% of those who voted supported the union.
It was pretty much a given that the deal would clear. Over the past few days, seats have been exchanged for $4 million, valuing the exchange at nearly $5.5 billion. Just days before Archipelago and the NYSE announced their proposed merger in April, a seat was sold for a mere $1.62 million. That's why many of the complaints that the exchange was being priced too cheaply rang hollow.
The new company will trade under the ticker symbol NYX as early as next month.
Merging the ArcaEx electronic exchange with the bulwark NYSE is a pairing that made sense for both companies. The NYSE's market share of trades in NYSE-listed securities had been falling to record lows. It made more sense for the NYSE to embrace the fast-growing new economy marketplace by acquiring an established player than by trying to grow on its own.
Publicly traded exchanges have become plentiful these days. It's not just Nasdaq
Consolidation may continue, so don't get too attached to too many of those ticker symbols. For now, it's a good day for members of the NYSE and investors in Archipelago. Another batch of winners should be readers of the Motley Fool Rule Breakers newsletter service. The premium research product recommended the shares back in March, just before the merger was announced. The stock has nearly tripled since then.
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Longtime Fool contributor Rick Munarriz thinks that bids and asks are romantic in the appropriate context. He does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.