Comments on: Chart of the Week: NYSE Seats versus S&P500

By: Larry Nusbaum, Scottsdale

Larry Nusbaum, Scottsdale — Thu, 08 Dec 2005 03:01:44 +0000

I remember very well that prices for seats on the Philly, SF, LA stock exchanges and some options exchanges were very cheap after the crash of October 17, 1987. Look how they fell again in 2001/2002.

By: fatbear

fatbear — Wed, 07 Dec 2005 18:54:23 +0000

I faintly remember hearing on QXR yesterday that as part of the Archipelago deal the seats (i.e., membership) will disappear as such, and each NYSE seat holder will get stock worth $5MM. Today’s Times says

Many made millions on the deal, exchanging seats that traded as low as $975,000 in January for cash and shares in the new public company, the NYSE Group, worth more than $5 million.

So I guess the question is whether or not the new NYSE Group is overpriced; my guess is Yes.

A few years ago, as seat prices were falling, I spoke with a trader whose father had left him two seats: one he used and the other he rented out with the income being his mother’s support. He told me he’d never sell, no matter how low they went! Well, he’s got $10MM in stock to worry about now….

By: royce

royce — Wed, 07 Dec 2005 14:19:23 +0000

It’s a tough call on the S&P valuation issue. Small and mid-cap ETFs have had mid-teen growth in 2005 while the SPY is up only around 6+%. The multiples for small and mid-cap stocks are higher than that of the S&P. I guess the question is, why?

By: Andrew Schmitt

Andrew Schmitt — Wed, 07 Dec 2005 14:19:13 +0000

I think the desire for better regulation and oversight of emerging market equities will lead to an increase in listings of foreign companies on exchanges that require transparency.

Hence, the market is pricing exchanges that offer this service at a premium.