Duncan Niederauer appeared as calm as could be. The CEO of the New York Stock Exchange Euronext spoke serenely about annual results, turnover and loss margins. He spoke of significant investments in 2010 and said that, "in short, we believe 2011 should provide a better environment for doing business."
Niederauer's telephone conference with nine market analysts on Tuesday morning lasted exactly one hour. But the most interesting item on the 50-year-old's agenda was kept under wraps. Niederauer and his team said nothing about it and the questions from the otherwise-excellently-informed analysts made it clear that they were in the dark.
It was only the next day that the NYSE made the sensational news public. The announcement came prematurely, the result of rumors flying around the trading floors in Manhattan and Frankfurt. Yes, the NYSE and its primary European rival the Deutsche Börse confirmed in identical statements, it is true that a fusion is in the works. It is a merger that would result in the largest stock exchange in the world.
Originally, the merger was to be announced next week as a fait accompli. The talks had been conducted in the strictest of secrecy, complete with codenames and highly confidential documents. Two earlier merger attempts, after all, had failed -- one in 2009 and another in 2009. And the size of the deal made the negotiations particularly sensitive.
Consternation in New York
The talks of 2009 are said to have failed due to German fears of becoming little more than a branch of the NYSE, as largely happened to Euronext. That problem, however, looks to have been solved: Deutsche Börse stockholders are to receive 59 to 60 percent of the stock in the new company.
That, however, has resulted in consternation in New York. "The US shareholders lose their majority control," complained CNBC on Wednesday. UBS trader Art Cashin, an institution on the NYSE trading floor, also seemed unsure of the deal on Wednesday. He said that Niederauer's position as CEO would indicate that the NYSE would still have substantial influence. But, he complained, details of the looming deal are in short supply.
Still, many feel that the NYSE has a dark future should it remain solo. It is losing market share and classic stock trading is becoming less important. The attractive trading floor, constantly polished to a glistening shine, is a relict of the past and will soon disappear entirely.
The NYSE earnings statistics that Niederauer made public on Tuesday were anything but exhilarating. In the fourth quarter of 2010, profit was 21 percent lower than in the same quarter of the previous year, a result of the strengthening dollar and weak trade volumes on both continents.
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