Cramer Critical About NYSE (NYX, NDAQ)

On tonight’s MAD MONEY on CNBC, Jim Cramer was discussing the rhythm of the markets being short sharp rallies followed by sell-offs.  But he also had the CEO of NYSE Euronext, Inc. (NYSE: NYX) Duncan Niederauer on for a taped interview from earlier today. 

Shares of NYSE were hosed worse than a rented tuxedo at a pool party after its earnings today.  Shares fell 14% today to $71.03, and the 52-week trading range is $64.26 to $101.00.  This literally traded over $1 Billion worth of stock today.  As a reminder, this was Cramer’s #1 Growth Stock for 2007 that he actually updated in the first trading day of this year.  Here you can see where he said he thought it was having a great quarter and could be ridden higher, before today.

What is interesting is that Cramer already gave a video blurb on this today with a large disappointment.  Cramer was shocked that they did not have a blow-out quarter despite the huge market volatility and he’s shocked that it didn’t grow market share.  Cramer noted in the interview about negative operating leverage, meaning they lose more money on more volume.  Niederauer said there is a level he has to focus on, as the has gotten a lot done but has much more to do.  The 2007 story has a lot of room to improve and they have much to work out on technology savings.  After that they will look at being held to accountability.

As far as buying the American Stock Exchange, the NYSE wanted the ETF and for emerging companies stock listing platform.  Cramer even wondered if the NYSE was a burden on Euronext because of the negative dollar etc.  Cramer even noted that the Euronext was worth $23 Billion, and that would mean the NYSE is worth negative-$3 Billion.  As far as clearing, Cramer wonders why they are not in clearing yet.  Cramer even brought up the point that the actual NYSE stock is such a horrible stock to trade.  Niederauer hinted at a stock split here to narrow the bid-ask spread, and he even discussed the possibilities of a share buyback or dividend boost.  As far as China, the NYSE wants to do more and is focused there.  Lastly, Cramer asked if Niederauer was given a bad hand, but he did not throw John Thain under the bus.

Jon C. Ogg
February 5, 2008