The New York Stock Exchange is back in play — and it may be sold lock, “stock” and building as soon as next year, The Post has learned.
Big Board owner Intercontinental Exchange (ICE) is laying the groundwork. The latest all-out drive to make it more profitable, powered by better and faster technology — and a regulatory overhaul to regain market share — is pure window dressing, according to analysts and knowledgeable exchange watchers.
This window-dressing could presage the once unthinkable: the closure of the Big Board’s iconic trading floor.
“There is only one move, and that is a sale or spinoff of the NYSE,” said Jim Osman, chief executive of the Edge Consulting Group in London, a research firm that specializes in spinoffs and special situations.
Osman, speaking to The Post in the wake of the NYSE’s latest plans to slash trading fees and punch high-speed competitors and dark pools in the gut, said the rationale made sense now that ICE has divested most of its stake in Euronext.
The Atlanta-based ICE, led by Jeffrey Sprecher, retained the prized international derivatives portion of Euro-next. That prompted Osman to conclude the next step could see it parting company with the Big Board’s equities franchise in lower Manhattan.
“We believe post-divestiture of the European business, it might now look to divest NYSE — the cash equities exchange — considering the fact that its core interest area [is] the [London International Financial Futures and Options Exchange] business that provides a duopoly for ICE in the European derivatives market along with [rival] Deutsche Boerse’s Eurex platform,” according to Osman.
Despite efforts to fortify the NYSE’s struggling stock-trading business, Osman’s view gained traction last week. The exchange’s latest multimillion-dollar renovation to spruce up its famous neoclassical building fronted by Corinthian columns is also seen as more pre-sale window dressing.
The exchange is making more money today as management cuts costs. But its low-margin stock-trading business, with a 20 percent market share — down from 80 percent a decade ago — is propped up by listing fees and a data business.
Diego Perfumo, an exchange analyst at Equity Research Desk in Greenwich, Conn., is now holding firm to the NYSE sale prediction he made in 2013 after ICE’s $8.2 billion takeover of NYSE Euronext.
Perfumo says the NYSE’s latest proposal to slash Wall Street banks’ trading costs by a huge 80 percent in exchange for more of their stock trades could ultimately boost the price ICE is offered. “Honestly, they are going to be looking for more value — and the value, if the NYSE is sold, will be reflected in the acquisition price,” he said.
Timing of this sale? “I would say within a year, you will know how this game is going to play out, that’s my guess,” said ICE investor Thomas Caldwell, chairman of Caldwell Securities, once one of the largest owners of the NYSE prior to its transformation into a public company in 2006.
Other analysts think a sale could take longer to play out. “ICE might turn around and sell the NYSE at a better price,” Caldwell added. “I like what he is doing. Sprecher is a brawler, an entrepreneur, and not part of the New York establishment.”