BATS to Start Listing Stocks to Lure Cost Conscious Firms

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BATS Global Markets has launched its primary listing venue that offers an alternative to NYSE Euronext (NYSE:NYX) and Nasdaq OMX (NASDAQ:NDAQ) for companies wanting to go public. BATS has primarily been a trading-only exchange where mostly high-frequency trading firms carry out their trades. With the launch of the new listing venue, public companies can now transfer listings to BATS from other venues or do initial public offering there. BATS hopes to make a mark by coming up with innovative solutions in an area that hasn’t been seriously challenged for dozens of years. Apart from this push, BATS also plans to distinguish itself with lower fees and size requirements than the New York Stock Exchange and Nasdaq stock markets. It is also looking to establish a market making program to support its listings market. [1]

We have a price estimate of $25.80 on Nasdaq’s stock, about the same as the current market price.

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See our full analysis of Nasdaq OMX and NYSE Euronext

The market for primary listings is tough to break into given the long history and strong brand recognition the top players in the market enjoy. Also the lower requirements for listing on BATS means that BATS is targeting different set of companies to list on its exchange than do Nasdaq OMX or NYSE Euronext. Thus only a handful of companies are expected to transfer their listing to BATS which will not have any significant effect on the business of Nasdaq OMX or NYSE Euronext.

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Notes:
  1. BATS to establish market-making programme, FT, Dec 5, 2011 []