Thursday, September 29, 2005

Reuters' Malone to join Luchetti on short bus

Reuters (current parent of INGP until NDAQ deal closes) writer Scott Malone produced an article today that is more ridiculous rhetoric that so many business writers are scribing as they try to fill the time until the NYX deal closes.

Malone's article has the headline, "More NYSE seatholders join Archipelago deal suit." At first blush this implies that Reuters has unearthed some news-worthy insight into the NYX deal. Conjures up an image of a growing group of disgruntled seatholders that will try to thwart a NYX deal. Then you read the rest of the article and it becomes clear that this is about as news-worthy as an elementary school's recess kickball game score -- who the $@%! cares?!

Malone wastes his readers time by stating that
, "Seven new seatholders joined a suit first brought by William Higgins in May, claiming the terms of the deal are unfair to the exchange's 1,366 seatholders. With the addition of the new members, 11 seatholders now oppose the merger. . ."

Once again, lets look at the facts:
2/3 vote is needed for the NYX deal to be approved by the NYSE members. That comes to 910
votes saying "yeah" to enable the deal to go through.

11 seatholders anti-NYX? Maybe Malone figures that 11 seatholders added to the ~200 or ~300 seats held by Mr. Urstadt's group (the real-estate executive who WSJ wrote about at the beginning of August [see below, "WSJ reporter could use ride on short bus"]) makes a difference.

Again, lets run the numbers:
1366 seatholders - 300 (just to be conservative) from Urstadt's gaggle = 1066 seatholders left to vote for the deal to go through. Now lets add Malone's latest discovery to the equation:

1066 - 11 newly disgruntled ner-do-wells = 1055 seatholders voting in favor of the NYX deal.

NYX needs 910 "yes" votes. 1055-910 = 145 more "no's" necessary to toss a hurdle in front of this landmark deal. Another way to look at 145 is that it's 10.6% of the total base of seatholders that would need to vote to thwart a deal that makes them quite wealthy.

Malone, maybe you and Aaron Lucchetti from the WSJ should get together and write a book. Maybe call it, "Dummies for Dummies."


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