Wednesday, November 15, 2006

Full Steam Ahead!

This morning it was announced that DB has pulled their bid for Euronext. To be sure, the NYX short sellers scrambled to mitigate their losses as Hybrid takes hold and the management team at NYX flex their business accumen and cut costs significantly (making ~500 employees redundant).

CNBC's Kramer finally woke to NYX's potential as he demanded that his viewers buy at least one share of NYX. While his price projections (he called for NYX to be $250 stock with earnings of $10/share, but didn't specify his time frame) may not be rooted in EVA, cash flow projections, IRR, or other metrics, his sentiment is clear -- get long NYX because they're going to lead the global capital markets.

The nonsense that Lucchetti wrote about months ago related to the DB bid again seems to be nothing but a waste of ink, precious real estate in Wall Street's favorite rag, and a extraordinary waste of readers time. The outcome, which has been written about often here at NYSE ArcaNews, is that NYX and Euronext are merging (subsequent to a final shareholder vote on 12/19). The NYX will compete on a global basis and be able offer unprecedented liquidity, technology, structured products, and breadth of revenue streams.

It's been fun to watch the open interest in the NYX 115 2008 options. When I BOT mine, my contract was the only one in the overall open interest. Interest in this option has risen dramatically as 2008 gives plenty of time for Hybrid to launch, Euronext to be inegrated, and other dramatic catalysts (maybe Sarbanes-Oxley repealed, acquisitions, competitors stumbling, NYSE Arca picking up steam in its listings and winning share from classic early-stage lister Nasdaq, etc.).

The Curb (AMEX) is still out there and its connection with SIAC is interesting. There are certainly synergies between AMEX and NYSE and it should be interesting to see AMEX's plans unfold as consolidation in exchange-land continues (and NYX leads the charge).

It's interesting to watch the NYSE evolve -- and it's especially fun to watch the centuries old NYSE transform itself into an Archipelago!

Happy Thanksgiving to my loyal NYSE ArcaNews readers. NYX shareholders certainly have much to be thankful for this year.


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