Wednesday, February 01, 2006

Arca turns in an amazing quarter!

Yesterday's conference call was monumental. It was the last earnings call for Archipelago Holdings as a seperate entity. The results for the quarter were outstanding. In fact, once merger costs are taken out, AX beat the Street by three cents!

The takeaway from the WSJ article is:
"Excluding merger costs and related executive compensation of $34.7 million, Archipelago said it would have earned 28 cents in the latest quarter. Analysts polled by Thomson First Call had estimated earnings of 25 cents a share."

Once again, AX's extremely talented management team has continued to deliver substantial shareholder value. And for that matter, they've continued to deliver significant value to its customers. This is evidenced by the growing of Listed, AMEX, Nasdaq, and options market share. The share data regarding Nasdaq for the 4Q reflects a pricing model that the Nasdaq had until they realized that their model lacked any real business sense. Subsequently, there has been an uptick in Nasdaq market share for Arca since Nasdaq adjusted its prices upwards.

It's worth noting a couple of the analyst comments from yesterdays call. The call may be heard here. At approximately 28 minutes and 40 seconds into the call (you can move the playhead of the media player to get directly to this point of the call) Richard Herr from Keefe, Bruyette, & Woods demonstrated his poor understanding of AX. He asks a question about declining market share, but management quickly helped Mr. Herr understand the numbers he was looking at. The numbers he alluded to are actually a positive for AX -- not a negative as he initially concluded.

Since this is the final conference call for Arca as a stand-alone company I'd like to thank and congratulate all of the devoted employees of Archipelago who have worked incredibly hard to build a revolutionary bourse. So revolutionary is this bourse, that the NYSE has agreed to merge with it. This merger represents the biggest structural change Wall Street has seen since the advent of telephones on the floor.

And, the technology that Arca brings to the party is second to none. It is an engine that inherently has unmatched capacity, speed of execution, and economies that scale like wild fire!

Congratulations Arca on all of your success!


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