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Buying the N.Y.S.E., in One Shot

by MoneyMagnetMagnate
13 replies
  • OFF TOPIC
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...Mr. Sprecher, a man virtually unknown outside of financial circles, is poised to buy the New York Stock Exchange. Not one of the 2,300 or so stocks traded on the New York Stock Exchange (combined value of those shares: about $20.1 trillion). No, Jeff Sprecher is buying the entire New York Stock Exchange.
It sounds preposterous. A businessman from Atlanta blows into New York and walks off with the colonnaded high temple of American capitalism. But if all goes according to plan, his $8.2 billion acquisition, announced a few days before Christmas, will close later this year. And with that, 221 years of Wall Street history will come to an end. No more will New York be the master of the New York Stock Exchange. Instead, from its bland headquarters 750 miles from Wall Street, Mr. Sprecher's young company, IntercontinentalExchange, will run the largest stock exchange in the nation and the world.
http://www.nytimes.com/2013/01/20/bu...yse.html?_r=1&
  • Profile picture of the author HeySal
    So does that mean we'll be able to arrest the Wall street guys that were "too big to jail" once they are no longer employed?
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    Sal
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    • Profile picture of the author seasoned
      Originally Posted by HeySal View Post

      So does that mean we'll be able to arrest the Wall street guys that were "too big to jail" once they are no longer employed?
      NOPE! So he bought the N.Y.S.E.. You know what that gives him?

      1. A COMPUTER network
      2. A ROOM with pods that display things on screens, and allow entry.
      3. Exchange software
      4. Notoriety
      5. Basic offices.
      6. A fancy address.
      7. Historical communication avenues(such as phone numbers)
      8. Limited control over some seats.
      9. Obligations.
      10. INITIAL(I STRESS INITIAL) members and stock records.

      Now, he is planning on maybe throwing away 5 and 6 and some of 7, just by moving.
      One wrong move, and he can lose much of the value of 8.
      A few more wrong moves, and he can lose a lot of 10! If he does, the value of 1,2,3,4 all drop.

      People hear new york stock exchangee and think STOCK! It was and always will be an EXCHANGE! It was apparently the FIRST stock exchange. Well, rules and all were too strick, and so ANOTHER popped up, the AMERICAN stock exchange. THEN, long after, some stocks languished and the National Association of Securities Dealers decided to start their OWN. You know it by its initials, NASDAQ. So new exchanges aren't unheard of. A while back, they even broke a rule in place for about 100 years, and let NASDAQ stocks onto the DJIA! Prior to that, they HAD to be on the NYSE. (BTW that rule is controlled by Dow Jones. The NYSE has NOTHING to do with it.)

      BTW Some might wonder why I mentioned seats. Well, it basically means they are allowed to trade on the NYSE, and it costs a BUNDLE before they will even TALK to you! http://www.investopedia.com/ask/answ...#axzz2Ii984SJf

      EVEN many of the people you see on the floor have NOTHING to do with the NYSE. For example, the KEY guys are called "market makers". THEY are employed by stock brokers, and investment bankers. Basically they are given a stock of stock, so to speak, for like an IPO, and sell at the price they are to sell at. They then try to buy at the lowest(assuming they have an order to buy for that much), and sell at the highest price. So they kind of keep things moving. Of course, that goes on as long as the stock exists.

      Steve
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      • Profile picture of the author whateverpedia
        Originally Posted by seasoned View Post

        It was apparently the FIRST stock exchange.
        The first stock exchange in America that is. If I recall correctly, the first was in Amsterdam, followed by London.

        PS By recall correctly, I mean learning about this stuff, not that I was actually there
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        • Profile picture of the author seasoned
          Originally Posted by whateverpedia View Post

          The first stock exchange in America that is. If I recall correctly, the first was in Amsterdam, followed by London.

          PS By recall correctly, I mean learning about this stuff, not that I was actually there
          OK, I thought I might be called on that, but all I mentioned were ones in the US. YEAH, the US probably wasn't the first to have one, and certainly NOT the first one with the concept. The US IS a young country, after all. Gee, berlin celebrated its THOUSANDTH year some time ago, and the US celebrated its 200th year in 1976.

          BTW Every major country, and probably many smaller countries, has a stock exchange. Others probably have the basic concept implemented somehow. I've heard of two similar methods some smaller asian cultures do, for example.

          Steve
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  • Profile picture of the author kenmichaels
    One step closer to global power.

    if he pulls it off, how many years do you think it will take before the gov steps
    in and makes some excuse to steal it.

    just my initial thought.
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    • Profile picture of the author whateverpedia
      Originally Posted by kenmichaels View Post

      how many years do you think it will take before the gov steps in and makes some excuse to steal it.
      How many years will it be until the government has to bail him out is a better question.
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      • Profile picture of the author kenmichaels
        Originally Posted by whateverpedia View Post

        How many years will it be until the government has to bail him out is a better question.
        or better yet, how many years will they surreptitiously undermine him... so that they
        HAVE to ( cough cough ) bail him out
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        • Profile picture of the author whateverpedia
          Originally Posted by kenmichaels View Post

          or better yet, how many years will they surreptitiously undermine him... so that they HAVE to ( cough cough ) bail him out
          Hmm.

          Anyway, allowing one person to control the NYSE is NOT a good idea.
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  • Profile picture of the author J50
    Most of the NYSE is in the cloud now, the days of floor brokers is slowly coming to an end.
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    • Profile picture of the author seasoned
      Originally Posted by Vokco View Post

      Most of the NYSE is in the cloud now, the days of floor brokers is slowly coming to an end.
      It probably isn't quite like trading places, but BELIEVE ME, it is NOT 100% automated. Of course, mutual funds and the like DO have algorithms that make it whipsaw at times.

      Steve
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      • Profile picture of the author J50
        Originally Posted by seasoned View Post

        It probably isn't quite like trading places, but BELIEVE ME, it is NOT 100% automated. Of course, mutual funds and the like DO have algorithms that make it whipsaw at times.

        Steve
        I don't think you mean mutual funds, a mutual fund is a collective investment vehicle with a many outside investors. They're normally not very liquid and have a large spread to lock investors in.

        I think you mean HFT? Yeah, but because their strategy relies on liquidity they typically stick to stuff that can easily be bought (and sold). Anything that can easily be brought (liquid) = lower spread = lower buying cost, which creates opportunity for a computer program to profit from micro movements in price. They're normally only trying to capture like 0.10% increment at any given time.

        But ringing up a floor broker is a complete waste of time literally. Unless you're Warren Buffett and actually trying to either acquire a stake or buy out a company (or sell). Not only is buying through a computer cheaper, but you can buy in real time and lock in a better price.

        The stock you want might be down 5% for the day, by the time a broker has started executing your order it might of moved up 1%. If you're buying a $50 million position, that's $500,000 potential loss.
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        • Profile picture of the author seasoned
          Originally Posted by Vokco View Post

          I don't think you mean mutual funds, a mutual fund is a collective investment vehicle with a many outside investors. They're normally not very liquid and have a large spread to lock investors in.
          NOPE, I mean MUTUAL FUND! If things are a certain way, they may sell huge parts of a position. BTW did you know that US law requires that a fund distribute 80% of their profits every year? That means that any stocks that they have earned money on have to be sold enough to cover any requested dividends. They do that towards the end of the year. If they DON'T do that, THEY pay taxes, and the customers do ALSO!

          But ringing up a floor broker is a complete waste of time literally. Unless you're Warren Buffett and actually trying to either acquire a stake or buy out a company (or sell). Not only is buying through a computer cheaper, but you can buy in real time and lock in a better price.
          Yeah, it is NEAR real time, not real time. If you buy a stock that is at the market of $15, at $10, you may NEVER get the stock, even if you are the only one buying. LUCKILY, most buy and sell at the market, so you may not notice BUT, even then....

          The stock you want might be down 5% for the day, by the time a broker has started executing your order it might of moved up 1%. If you're buying a $50 million position, that's $500,000 potential loss.
          There is ALWAYS the potential for loss! Apparently it is relaxed somewhat now, but it used to be that nearly ALL free stock quotes were INTENTIONALLY DELAYED 15-20 minutes on average. So you couldn't even know what the stock was selling for NOW. Of course, RICH people paid more and got more near real time quotes. And if you buy $50milion, GOOD LUCK filling it with one order! Oh SURE, you may have one buy order on YOUR end. Chances are that there are HUNDREDS of buy orders on the other end. Lets take berkshire. It's expensive! THEY are RICH! Average trade size is 1 $143736.51 so you may have to have 348 orders to fill YOURS! Average day volume is 962, so it would take the better part of a day to fill. If you tried to do it all at once, people may catch on, and the price would go up. If you did it at a set price, it could take several days, or never, to fill. ALSO, if you try to buy a LOT of stock, maybe as little as 5%, there is a federal law that you have to declare it, etc... So don't think buying a controlling interest in a publicly traded company is THAT easy. OH, you may sneak up to the limit, and THEN declare or some such.

          From the sec site:

          Question: A customer instructed its broker to purchase up to 4.9 percent of the outstanding class of a Section 12 registered voting common stock of a company. The broker mistakenly purchased over five percent for the customer's account. The customer refused to pay for the excess shares and instructed the broker to sell all shares in excess of 4.9 percent. Is the customer required to file a Schedule 13D or 13G pursuant to Rule 13d-3(a)?

          Answer: Yes. The customer acquired beneficial ownership of greater than five percent of the class pursuant to Rule 13d-3(a) and, therefore, is required to file a Schedule 13D or Schedule 13G under Sections 13(d) and 13(g) of the Exchange Act. The absence of an intent to acquire in excess of five percent is not a consideration with respect to the applicability of Sections 13(d) and 13(g). [Sep. 14, 2009]
          Oh well, all I was talking about was the market makers. as to when the decide the price, the DEFINITELY do at the IPO, and apparently beginning of day, and have some pull in between BUT, even if they handled every non market order, it would be FAR from handling every order. Most orders probably ARE at the market. And mutual funds MAY hold a major position and if they get out, it CAN have a big effect. Don't forget, they may have millions in any one stock.

          I was actually shocked, like 9 years ago or so, when I found freerealtime. Prior to that, I don't think I ever saw real time for free. Even quotes on the NEWS were DELAYED! They generally have a message somewhere telling you.

          Steve
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  • Profile picture of the author J50
    You don't need real time unless you're a speculator (which I wouldn't recommend) Google Finance does the job just fine (and it's free) even if there is 15 minute delay on data. Price and price action should be the last thing you look at. EPS, P/E and key stats and ratios including information about the company (all in their annual report).

    If anybody wants to invest, first invest in yourself and learn how to read financial data. Every industry is full of cowboys, whether that be financial or digital marketing - I'd highly suggest you don't become one of them. 99% are on a slow road to going broke.
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