Posted on: Tuesday, January 13, 2004
Firms to list shares on both NYSE, Nasdaq
By Walter Hamilton
Los Angeles Times
NEW YORK — The New York Stock Exchange, its once-sterling reputation dented by scandal, suffered a different sort of hit yesterday when the rival Nasdaq stock market announced that six Big Board-listed companies will also list their shares on Nasdaq.
The dual listings by big names such as brokerage Charles Schwab Corp. and tech giant Hewlett-Packard Co. will end a decades-long system in which companies have listed their shares only on the NYSE or Nasdaq, never both.
The other dual-listers will be energy company Apache Corp., software firm Cadence Design Systems Inc., mortgage-lender Countrywide Financial Corp. and drugstore chain Walgreen Co.
All the companies will retain their three-letter NYSE ticker symbols when they list on Nasdaq in the next few weeks. To lure the companies, Nasdaq agreed to waive listing fees, which can run into the tens of thousands of dollars, for one year.
Experts said individual investors were unlikely to reap immediate benefits, such as getting better prices when trading stocks. Some observers said it was too soon to tell whether dual listings would have any significant long-term impact.
But if additional NYSE companies agree to list on the all-electronic Nasdaq, the practice could herald the beginning of a long-predicted shake-up in the U.S. stock market.
If shares increasingly change hands via computer, the NYSE's human-based trading system — in which stock trades typically are made face-to-face on the exchange floor — might decline in importance.
At a minimum, observers said, the dual-listing announcement represented a significant public-relations coup for Nasdaq and a blow to the NYSE.
Though the two markets battle each other for listings, the NYSE has long held the upper hand.
Even during Nasdaq's boom years, dozens of companies deserted Nasdaq every year for the perceived higher prestige of the Big Board. Only one small company — Aeroflex Inc. — has ever fled the NYSE for Nasdaq. Now Nasdaq is attracting "name" companies without having to persuade them to abandon the NYSE.
"It could be the beginning of a small crack in the NYSE's dike," said Junius Peake, a finance professor at the University of Northern Colorado. "A statement has been made in which people are saying they're willing to take on the NYSE."
Big Board officials downplayed the significance.
"There's nothing new here," said NYSE spokesman Robert Zito. "These companies have all been eligible to trade on multiple markets for years and years and years."
Nasdaq, which suffered when the bear market decimated its once high-flying stocks in the past few years, is trying to benefit from the NYSE's recent scandals, including the uproar over former chairman Richard Grasso's pay package, to pitch the dual-listing concept, experts said.
"This is a significant move by Nasdaq to try to capitalize on the stock exchange's embarrassment over Richard Grasso," said John Coffee, a Columbia University law professor.
In theory, dual listings eventually could pay off for investors by increasing the number of brokerage firms that trade the stocks, thus increasing price competition. For example, an investor trying to sell a stock could find more potential buyers and get a higher offer for the shares.
It also could mean faster execution because more trades would be done electronically.
"Investors are always helped when competition is enhanced," said Edward Knight, Nasdaq's general counsel.
