The New York Stock Exchange, the largest equity market in the world, traded its own shares Wednesday morning for the first time in 214 years as a not-for-profit private venture.
Shares of NYSE:NYX (NYSE:NYX) opened at $66.98 US as traders crowded the floor of the Wall Street institution in their multi-coloured jackets watching the stock rise $15.75, or 25 per cent, by the close to $80 US.
A market that has become a symbol of free enterprise went public, as NYSE Group Inc., the day after it closed its $10-billion US acquisition of electronic rival Archipelago Holdings Inc.
The acquisition of Archipelago means the end of those multi-hued traders, as they are ushered out the door to be replaced by computer screens on millions of desks across North America and the world.
The move to a public company may foreshadow a host of other changes down the road. The exchange may merge with other world markets, expand into new businesses, trade Nasdaq-listed stocks or move into derivatives, corporate bonds, options or commodity trading.
It may even go looking for an acquisition, perhaps another exchange at home or abroad.
The changes are part of a worldwide move by stock markets into the modern era. The Toronto Stock Exchange got rid of its traders several years ago, along with the bustle on the trading floor, the yelling and the little bits of paper that were used to keep tabs on million-dollar deals.
The TSX trading floor is now a slightly musty art deco hall for hire, used for annual meetings, receptions and shows. The little bits of paper are gone and the traders are now sitting in front of their computer screens in the tall office towers nearby.
Companies are bought and sold at the touch of a button on the TSX nowadays.
The TSX also trades as a public company on the TSX, under the symbol TSX:X.
For the time being, NYSE Group Inc. will be owned by its seat-holders. But a third of those seats could be sold in a secondary offering this spring with the rest going on the open market over the next few years.
Those seats are worth having.
Under the final agreement with Archipelago, owners of the 1,366 NYSE seats received 80,177 shares of NYSE Group stock plus $300,000 US in cash and another $70,571 US in dividends.
At Archipelago's Tuesday's closing price of $64.25 US, the deal valued each seat at approximately $5.5 million US.