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Richard Rosenblatt and Joe Gawronski from Rosenblatt Securities write: Now that the basic facts are out in the newspapers, we thought we’d do a little analysis of the NYSE/Arca merger and attempt to identify implications. Of course, whether this is a “good” deal or “bad” deal (the most common question we get asked) depends on where you’re sitting and also can change over time in very unforeseen ways. For instance, when Goldman Sachs paid $6.5 billion for Spear Leeds back in 2000, seemingly they were buying a top OTC market maker. A couple of years later when the bubble had burst and the rise of ECNs had radically altered the OTC business and decimated market makers, it seemed like the specialist unit might be the hidden gem. Not long after that, in the wake of the Grasso debacle and specialist scandals, this analysis too proved misguided. Today, with all of the focus on controlling the desktop and electronic
direct market access (DMA), it would seem that Spear Leed’s RediPlus front-end and its early penetration of this market space might prove the true crown jewel. We’ll see. With respect to comments on the merger, at minimum we’ll try to offer some insights that reporters can’t be expected to make without the proximity to the floor and the knowledge of markets a broker possesses.
Winners and Losers
Because so many unanticipated things can happen over time (as with Goldman’s Spear Leeds acquisition), we always hate to answer this question, but everyone always wants...................... To view our full article Click here
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