Friday, September 30, 2005

More nonsense from WSJ's Lucchetti

Today's WSJ has an article written by Aaron Lucchetti titled, "Langone Lobbies Against NYSE Deal." Once again, WSJ editors have approved an article with absolutely no merit and zero news-worthiness. Let me explain.

For starters, Lucchetti writes, "He [Langone] has spoken with individual NYSE members and officials of brokerage firms and the floor-trading firms known as specialists; together these people he spoke to control more than 100 of the NYSE's 1,366 memberships, also known as seats, two of the people said. . ."

Two things in this single paragraph are worth noting:
1) ~100 seatholders are Langone's target market -- As we explained yesterday, there are 1366 seatholders in total. 2/3 of these guys need to bless the NYX deal. That comes to 910 votes. Yesterday, Reuters' writer Scott Malone deemed it worth his time to scribble an article that states that there might be as many as 11 new
dissidents joining the anti-NYX revolt. Adding the (conservative number) 300 dissidents that Lucchetti wrote about at the beginning of August (see "WSJ reporter can use ride on short bus" at here at ArcaNews for more on that pathetic piece). We get 411 nay-sayers. This assumes everyone that is spoken to joins Langone's revolt. 1366-411 = 955 seatholders still in favor of the NYX deal. That leaves 7% more seatholders that would need to join the revolt in order to create 1/3 of seatholders voting against the NYX deal. But wait, there's more idiocracy in Lucchetti's diatribe.

2) Look at Lucchetti's source for quantifying the number of people that Langone is barking at. See the last line of the quote from Lucchetti's article above. ". . .control 100 seats, two of THE PEOPLE SAID. . ." Begs the question, what people?

Lucchetti writes, "In the past three weeks, Mr. Langone has held several conference calls and one dinner to help drum up opposition to the Big Board's plan, according to people familiar with the meetings. . ."

People familiar with the meetings? This is the WSJ and all they can do is name nameless sources? The mediator of the conference calls is familiar with these meetings, does that make them a solid source?!

Lucchetti writes in the article, "Many NYSE member firms have yet to decide how they will vote on the deal. Most have remained silent, awaiting more details from the exchange. LaBranche's chief executive officer, Michael LaBranche, meanwhile, spoke positively about the deal in the weeks after it was announced. . ."

Two things about #3 above. What about the fact that most members have not spoken with the media about the NYX deal imply that these members are unsure of which way to vote? How does Lucchetti jump to this conclusion?!

Finally, Lucchettis writes that LaBranche has spoken positively about the deal.
Thing is, towards the beginning of this article Lucchetti writes, "Among the firms Mr. Langone has spoken with are: LaBranche & Co., a specialist that owns 39 seats; Bank of America Corp. specialist operation and Susquehanna International Group LLP, which owns a smaller NYSE specialist firm called SIG Specialists, people familiar with the matter said. . ."

LaBranche has stated that they're pleased with the deal and its terms, so what difference does it make if Langone talks with them? Also, who at LaBranche did he speak with? Their board? Mr. LaBranche himself? And in true Lucchetti fashion, the nameless sources here are "people familiar with the matter."

Stick with the facts and try to filter out the nonsense that a handful of bidness writers scribe. This deal is amazing, and that's why Goldman brokered it, why the NYSE board approved it, and why Mr. Putnam is being named a president of the new NYSE. It's also why the price of a NYSE seat is hitting all-time highs.

Just hang in there until the deal goes through. Then hold on tight as the NYX launches into the global trading marketplace for things other than just stocks. ETFs, bonds, computing power, futures, options. . .They're all coming to the incredibly efficient, top-of-mind share, electronic mega-bourse we know as the NYSE!


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