NEW YORK — Nasdaq, the 32-year-old electronic market suffering from the collapse of the Internet boom, denied a published report Tuesday that it is exploring a possible merger with the New York Stock Exchange.
The Wall Street Journal, citing unidentified sources, reported Tuesday that Nasdaq chief executive Robert Greifeld approached NYSE officials with the idea about three weeks ago. The concept is at a very preliminary stage and no formal proposal has been made, the Journal said.
In a statement, Nasdaq said the story was "based on rumors and speculation," and "has no basis in fact."
A spokeswoman for the all-electronic stock market used the opportunity to tweak its bigger rival, saying, "It’s natural that speculation of this type would arise when there is such broad acknowledgment that the NYSE needs to evolve toward Nasdaq’s market structure."
Greifeld and interim NYSE chairman John S. Reed were not available for comment. An NYSE spokesman declined comment.
The speculation comes during challenging times for both institutions.
The NYSE is dealing with criticism that its open-auction style trading system is antiquated, and the aftermath of controversy about former chairman Dick Grasso’s $187.5 million compensation package.
The Nasdaq, which rode high on booming technology stocks during the late 1990s, has struggled to recover from the collapse of many dot-com firms beginning four years ago.
A merger between the nation’s two biggest markets would likely be welcomed by Wall Street firms, which could potentially save money by combining their trading desks and reducing their membership fees.
However, there would be technical issues for the markets if they were to merge, including the fact that the symbols they use to represent listed companies are not compatible.
Aside from that, there are always disadvantages to eliminating competition, said Robert Aliber, a professor of economics and finance at the University of Chicago graduate school of business.
"It’s nice to know there are alternatives out there … economists are not comfortable with monopolies," Aliber said. "The question is whether a monopoly exchange would respond to changes in technology as rapidly as two that are relatively competitive."
Any such merger would be subject to approval by the federal Securities and Exchange Commission.
Copyright ©2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
