Nasdaq OMX Group Inc.
) announced a strategic alliance with SharesPost Inc. to build a
trading platform for unlisted stocks. The joint venture (JV) will
establish Nasdaq Private Market (NPM) in order to tap the private
companies through SharesPost's web-based platform.
Meanwhile, Nasdaq will own a majority stake in NPM, which is
scheduled to be operational later in 2013, subject to regulatory
approvals. Additionally, SharesPost will continue to run its
broker-dealer operations separately.
With a listing of over 200 fast-growing companies, SharesPost
operates on a web-based model and enjoys a wide-ranging network
of privately-held companies who manage liquidity programs, raise
primary capital online and offer shareholder liquidity options,
among other financially-valued services.
California-based SharesPost started operations in 2009 and has
witnessed rapid growth with the inclusion of technology start-ups
) as members, before these firms went public.
Hence, the JV paves the way for a new business opportunity for
Nasdaq as more companies desire to remain private given the
regulatory and other challenges in public listings. Nasdaq aims
to offer a complete package for managing funds to the private
companies through NPM. This will be complemented by SharesPost's
high-grade technology and transparent market.
The NPM JV is further expected to boost Nasdaq's competitive
leverage and market position, which deteriorated over the past
quarters due to the changing dynamics of the exchange industry.
At a time when the traditional equity and derivative trading
platforms have been experiencing weakness due to low trading
activity and volumes, we believe Nasdaq requires to diversify
into innovative business opportunities in order to retain
sustainable growth in the future.
While Nasdaq, LinkedIn and Facebook carry a Zacks Rank #3
(Hold), another outperfromer of the financial sector include
), which carries a Zacks Rank #1 (Strong Buy).
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