Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

Traders Poll

Would you feel better if the Chicago Stock Exchange were purchased by U.S. firm or consortium rather than a foreign one?

Yes

73%

No

4%

Doesn't matter to me

23%

Free Site Registration

August 31, 1998

Nasdaq Is Moving OperationsTo Times Square Location:Move Is Hailed as Marketing Coup for Exchange

By John A. Byrne

Nasdaq's latest weapon for upending the New York Stock Exchange does not directly involve more listings. The Big Board's arch rival has a much different weapon: the largest sign and a swaggering marketing and television complex in New York's revitalized Times Square.

While the Big Board remains the world's preeminent stock market, dwarfing Nasdaq in prestige and trading volume, the guns are out as Nasdaq aims to turn the tables.

Nasdaq has approved an agreement to lease 65,000 square feet of floor space in the new Conde Nast skyscraper at Four Times Square on 43rd Street and Broadway in midtown Manhattan. The exchange will move its current operations at 33 Whitehall Street in downtown Manhattan to the new location.

The centerpiece of the Times Square presence will be an enormous sign costing an estimated $15 million that will rise from the third story of the building to a height of 125 feet. The multimedia display will include video screens, billboards and a zipper circling the building.

Nasdaq, however, will have competition, of sorts. Times Square currently boasts a zipper run by Dow Jones & Co. directly opposite from Nasdaq's planned location. A second zipper is planned nearby by London's Reuters Holdings, and several blocks north a zipper snakes along the Morgan Stanley, Dean Witter, Discover & Co. building on Broadway.

But Nasdaq would be the first modern stock exchange running a zipper and occupying so much Times Square real estate. The space will house a revamped Nasdaq MarketSite, the visual display center currently located at 33 Whitehall Street, along with a broadcast center strung with television monitors visible from the street behind a semi-circular, two-story glass wall.

It is possible, say people familiar with the plan, that the National Association of Securities Dealers, the parent of Nasdaq, will eventually relocate its headquarters and executive staff from Washington to Times Square. Of the NASD's 3,100 staffers, Nasdaq employs nearly 400 in New York, and another 135 in Washington.

"It is a wonderful marriage," Grechen Dykstra, president of the Times Square Business Improvement District, told Traders Magazine. "We're thrilled Nasdaq is coming to Times Square."

A Nasdaq official said the new center will provide Nasdaq the sort of visual wherewithal to compete for valuable television time with the Big Board, whose opening and closing bells are a staple of business-news coverage.

A spokeswoman for the Big Board said the exchange had "no comment whatsoever on [Nasdaq's] efforts."

Under chariman and chief executive Frank Zarb's leadership, the NASD has wasted no time in improving its reputation in the wake of a price-fixing scandal on Nasdaq. The fallout from that scandal hurt confidence in the dealer market.

But with the Big Board having been hit with its own trading scandal recently, involving alleged front-running by brokers, the worst is probably behind Nasdaq. While Nasdaq has seen a flight of companies move to the Big Board, Zarb is determined to reverse the flight.

Part of his strategic thinking involves the acquisition of the American Stock Exchange. Another is an emphasis on projecting the intrinsic strength of the Nasdaq dealer market, with its modern network of interconnected market makers.

Moving to Times Square may be one of the savviest decisions of Zarb's career, people familiar with the plan say. "It will showcase a very modern exchange at the crossroads of global capitalism," one Nasdaq trader said.