Forget Nasdaq’s (NADQ) failed bid for the London Stock Exchange. Wall St. doesn’t like the stock. Over the last year, shares in the exchange operator are off about 10%. Shares in NYSE (NYX) are up over 50% during the same period. Shares in the CME (CME) are up 40%.
Wall St. likes the New York Stock Exchanges deal with Euronext and the Tokyo Stock Exchange.The premium that the NYSE gets is considerable. It has a market cap of over $13.8 billion on revenue of $1.6 billion.
The CME has a market cap is $19.6 billion, on revenue of $1.1 billion. Nasdaq has a $3.9 billion market cap against revenue of $1.5 billion.
Nasdaq is still viewed by many companies as a second place rival to the NYSE. As Morningstar points out: The largest risk facing Nasdaq is that trading in its listed stocks migrates to other venues such as rival electronic communications networks and off-exchange dark pools of liquidity. Another potential concern is a large shock to the system that would result in a significant decrease in trading by hedge funds and other hyperactive traders. We believe that a worst-case scenario event would result in Nasdaq’s fair value dropping by about one third.
Nasdaq did reports strong increases in its quarterly earnings.
But, Wall St. seems to be betting in the direction of the worse case.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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