Thursday, August 18, 2005

70/30, 80/20, 90/10, 100/0 -- Split of ownership doesn't matter

All the conjecture about what the proper split should be regarding ownership in NYX is laughable. Plenty of folks on Y! message boards and countless articles have addressed this issue. The bottom line is: When you look at the facts (specifically the S4 filed with the SEC recently) there isn't a thing about the split of ownership that matters to AX shareholders.

Here's what it says:
"In the proposed merger, Archipelago stockholders will be entitled to receive one share of NYSE Group common stock for each of their shares of Archipelago common stock." (Source: 3rd paragraph on page 2 of the S-4).

For AX shareholders the split has absolutely no impact on the transition of AX shares to NYX shares. It's not like AX holders are looking at getting 30% of an NYX share -- 1 AX share = 1 NYX share -- no matter what the split is.

To be sure, the split matters to folks that own seats and are looking at getting their stakes purchased before NYX is a public company. For AX shareholders there is no consequence to how the deal shakes out. But for the record, Thain and the majority of seatholders are fine with the 70/30 split. Of course it raises eyebrows since AX is a newish company and the NYSE has been around for two centuries, but beyond a brow raise, and some absolutely idiotic posts in the AX bleachers (read: Y! message boards), the details matter not.

Gotta believe that the smart money has been buying on the recent dips (which most likely are attributable to stock which could be sold for the first time since it IPO'd last year at around 11 bucks). Interestingly enough, over the past few days the last trades have happened at around 8:04 PM EST which indicates west coast trades -- like folks connected to the Pacific Exchange, perhaps.

The nay-sayers have to exist -- that's what makes a market. The key is keeping your eye on the ball, and keeping the crap about the split and its ramifications in perspective. There's no question that it's been a long strange trip since last August. . . But (I think I speak for folks that have been [and are] long AX) at least we're enjoyin' the ride! Again, for AX shareholders, the degree to which the ownership splits doesn't matter whatsoever. That's a fact that is supported in the S4!


Post a Comment

<< Home

Free Web Counters