WASHINGTON — Seagate Technology Inc., a leading maker of computer disk drives, said Tuesday it intends to leave the Nasdaq stock market and have its shares listed on the New York Stock Exchange.
Seagate's departure from Nasdaq comes as the nation's second-largest stock market is facing intense scrutiny by the government over dealer trading practices.
Alan Shugart, Seagate's chairman and chief executive, said the company's move to the NYSE was "totally coincidental" with the recent Nasdaq trading controversies.
"The image the New York Stock Exchange presents, we thought, was important for us," Shugart said. The international visibility of the world's largest stock market figured prominently in the decision, he added.
Seagate, based in Scotts Valley, Calif., reported record results for fiscal year 1994, with revenue of $3.5 billion and net income of $225 million.
Technically, Seagate has applied to list its common stock and its 6.75% convertible bonds on the NYSE, but there's little doubt the New York Stock Exchange will approve the deal.
Seagate was Nasdaq's 17th-largest company in terms of trading volume last year, and the largest company to jump to the NYSE, said NYSE spokesman Ray Pellecchia. Seagate is scheduled to begin trading on the NYSE on Dec. 12 under the ticket symbol SEG, the company said.
The NYSE, Nasdaq and the No. 3 exchange, the American Stock Exchange, vie for the rights to list shares of major companies.
The Amex took out a full page advertisement in The New York Times on Tuesday touting the 301 companies that switched from Nasdaq to the AMEX since January, 1987. The ad touted "narrower spreads" or a smaller gap between the best asking and best bidding sales prices for stock. Critics contend spreads on Nasdaq stocks are excessively wide, a charge the market disputes.
About 40 companies have jumped from Nasdaq to the NYSE this year, in line with last year's trend, he said.
Nasdaq, by contrast, has picked up 10 companies from the AMEX this year and 13 last year.
There's very little traffic from the NYSE to Nasdaq. That's partly due to NYSE Rule 500, which requires that 66.6% of a company's voting shares approve and no more than 10% of its shareholders object to moving off the Big Board.
Such a stringent delisting requirement led market analyst Junius W. Peake of the University of Northern Colorado to describe Rule 500 as the "roach motel" rule, after the popular insect trap. Companies can check in, but they don't check out, Peake said.