Slow period

Sorry that there's been a lul in the ArcaNews, but things have been pretty quiet. Reflecting on Putnam's remarks during last quarter's conference call (1/4/2005) -- specifically the portion where an analyst asks about synergies and accretion of INGP to AX -- Jerry said, "I better not say anything" about the potential for Instinet and ArcaEx to join forces (read: combine market share!).

My take on this is that INGP and AX are ironing out the details on how to structure an acquisition. Sources say that Reuters (INGP's parent) has a pretty high price tag on Instinet. So, the longer a deal takes, the more likely it is AX is trying to negotiate decent terms.

To be sure, AX has drifted slightly downward on ridiculously light volume. Today, however, there seems to be a significant increase in the number of AX shares traded. If and when the INGP buyout news is announced, my hunch is that AX will take a near-term hit as the Street tries to figure out whether Putnam got a good deal. But, as Buffet is fond of saying, ". . .in the short term the market's a voting machine, but in the long term, it's a weighing machine."

The sideways movement and gravity has kept AX from breaking out. Jeffries report this morning indicates that AX is growing market share. And, how about the deal AX signed with SUNW? Talk about diversifying revenue streams!