We might soon find out exactly how much SOX is costing the NYSE. As today's WSJ discusses, the NYSE wants to buy Euronext, which operates stock exchanges in Amsterdam, Brussels, Lisbon and Paris. A big motive for the move is that firms are reluctant to list in NY because of SOX. The article notes that only two of the top 25 foreign IPOs listed in NY this year. Firms looking for investors in the US are doing it privately. In other words, foreign firms are finding that the benefits of the US imprimatur in selling securities around the world just aren’t worth the cost.
The problem is that it’s not clear what the NYSE would get out of this deal. Presumably Euronext’s listing business would be fully priced. Of course the argument would be synergy, with the NYSE adding its brand name. But the WSJ article raises the reasonable question of how much the NYSE association alone would be worth to companies considering listing on a Euronext exchange.
So, for whatever reason, it would seem that the NYSE would simply be buying back the listings it’s lost because of SOX. Maybe NYSE ceo Thain can send the bill to Congress.
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