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Nasdaq Announces Plan to Go Public

April 27, 2001|Reuters

Nasdaq--the stock--may be getting closer.

The Nasdaq Stock Market said Thursday it plans to become a publicly traded company, a long-awaited move that would give the No. 2 U.S. stock market a more nimble ownership structure and the opportunity to raise cash for expansion.

"Offering shares to the public is a natural next step in the evolution of Nasdaq," Nasdaq Chairman Frank Zarb said in a statement. "When the time is right, we will do it. The result will be a Nasdaq with more resources, better able to compete and improve its market for investors and companies around the globe."

The timing will depend on a variety of factors, including recognition by the Securities and Exchange Commission that Nasdaq meets its requirements for stock exchange status, progress on technology and market conditions. Zarb said Nasdaq's board will discuss the exact timing in the fall.

Nasdaq, one of the symbols of growth and technology in the 1990s, has lost some of its luster in the last year amid the crash of many tech shares.

The size of the stock offering--which will make Nasdaq the first publicly traded U.S. market--has not been decided, but officials said they would like to see the widest possible distribution of the shares.

Thursday's announcement further distinguishes Nasdaq from the rival New York Stock Exchange, the world's largest equity market, which is still wholly owned by its member brokerages.

"Currently, the New York Stock Exchange has no plans for an initial public offering," an NYSE spokeswoman said.

Zarb declined to estimate the market value of Nasdaq, but the parent National Assn. of Securities Dealers recently sold 10% of the market to private equity firm Hellman & Friedman for $240 million. That would value Nasdaq overall at about $2.4 billion.

A stock market IPO, while revolutionary in the United States, has proved successful overseas. Germany's Deutsche Boerse recently offered its shares to the investing public in a move expected to raise $926 million in all.

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