NEW YORK, Dec. 30 -- Today’s Closing BellSM marks the official end of Member seat sales on the New York Stock Exchange in advance of the NYSE’s plans to become a publicly traded company by way of its merger with Archipelago Holdings, Inc. (PCX: AX). In 2005, NYSE seat prices have reached historic highs, quadrupling from a low of $975,000 on Jan. 11 to reach a new all-time high of $4 million in early December -- a 310% increase. The most recent seat sale, on Dec. 29, was for $3,505,000. This year’s 92 seat sales (as of this morning’s release time) are nearly three times the 30 seats sold in 2004.
New York Stock Exchange Ends Member Seat Sales Today|
--Trading License Auction Occurs Next Wednesday, Jan. 4 --
Seats on the Exchange represent both an equity interest in the Exchange as well as the right to access the trading facilities of our market. When the merger is complete, the NYSE’s 1,366 seat holders will become shareholders in the newly formed public corporation, NYSE Group, Inc. On Wednesday, Jan. 4, 2006, the NYSE will conduct a Dutch auction for trading licenses giving Member organizations access to the trading facilities of the NYSE market.
A Brief History on NYSE Seats
A Membership on the NYSE is traditionally referred to as a “seat” because in the early year of its existence, Members sat in assigned chairs in the hall where the Exchange’s daily roll call of stocks was conducted. After the post-Civil War boom in stock trading, to foster more liquid markets, the Exchange adopted a system of continuous trading, replacing calls of stocks at set times with simultaneous trading of all listed stocks on a large open trading floor. As part of the new system, brokers dealing in a particular stock remained at one location, giving rise to the specialist.
The term lost its literal meaning with the advent of continuous trading in 1871. Trading was conducted at trading posts on a large open floor, and gone were the seats that the brokers had occupied. Owning or leasing a seat on the Exchange enabled qualified and licensed professionals to buy and sell securities on the floor.
Originally, the number of NYSE Memberships increased or decreased as Members joined or resigned. In 1868 the Exchange established a fixed number of Memberships and revised its rules to allow Members to sell their seats. After selling for as little as $4,000 in the late 1860s and early 1870s, Memberships reached $80,000 by the turn of the century, reaching a high of $625,000 during the bull market of 1929 before reaching new highs of over $1 million during the 1980s stock market boom. In 1990, a seat sold for $250,000. The highest price ever paid for a seat was $4 million on Dec. 1, 2005, followed by several seat sales at the same price; prior to 2005, the record seat sale was $2.65 million set on August 23, 1999.
Historically, seat prices fluctuated according to the interplay of supply and demand and reflected the profitability of the brokerage business, the level of trading volume on the Exchange, and general economic conditions. Since the late 1970s, NYSE Members have been permitted to lease seats and their assigned trading rights to qualified individuals.
For more information on seats and historic seat prices, go to: http://www.nyse.com/seatprices
Trading License Dutch Auction to be Held on Wednesday, Jan. 4
On Jan. 4, 2006, the NYSE will make trading licenses available by means of a Dutch auction process called “SEATS” or “Stock Exchange Auction Trading System.” Trading licenses, which will be controlled by the Exchange, permit Member organizations access to the trading facilities of the NYSE market. All bids will be due by noon on Tuesday, Jan. 3.
For the 2006 SEATS auction, the NYSE has established a maximum bid price for each trading license of $73,935, which is a 20% premium to the average annual lease price for leases commenced during the six-month period ending Oct. 30, 2005. The minimum bid price is $49,290, which corresponds to a 20% discount to the average annual lease price for leases commenced during that same period.
For more information on the trading license auction: www.nyse.com/tradinglicense
Important Acquisition Information With Respect To The Merger
In connection with the proposed merger of the New York Stock Exchange, Inc. (“NYSE”) and Archipelago Holdings, Inc. (“Archipelago”), NYSE Group, Inc. has filed a registration statement on Form S-4 with the Securities and Exchange Commission (SEC) containing a joint proxy statement/prospectus regarding the proposed transaction.
The parties have filed other publicly available relevant documents concerning the proposed transaction with the SEC. The SEC declared the Registration Statement effective on November 3, 2005.
NYSE MEMBERS AND ARCHIPELAGO STOCKHOLDERS ARE URGED TO READ THE FINAL JOINT PROXY STATEMENT/ PROSPECTUS REGARDING THE PROPOSED TRANSACTION BECAUSE IT CONTAINS IMPORTANT INFORMATION.
NYSE members and Archipelago stockholders can obtain a free copy of the final joint proxy statement/prospectus, as well as other filings containing information about NYSE and Archipelago without charge, at the SEC's website (http://www.sec.gov). Copies of the final joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Office of the Corporate Secretary, NYSE, 11 Wall Street, New York 10005, 212-656-2061 or to Archipelago, Attention: Investor Relations, at 100 S. Wacker Drive, Suite 1800, Chicago, Illinois 60606 or calling (888) 514-7284.
The NYSE, Archipelago and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from Archipelago stockholders in respect of the proposed transaction. Information regarding Archipelago's directors and executive officers is available in Archipelago's proxy statement for its 2005 annual meeting of stockholders, dated March 31, 2005.
Additional information regarding the interests of such potential participants is included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC. This correspondence shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Certain statements in this correspondence may contain forward-looking information regarding the NYSE and Archipelago and the combined company after the completion of the transactions that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the benefits of the business combination transaction involving NYSE and Archipelago, including future financial and operating results, the new company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of NYSE's and Archipelago's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the ability to obtain governmental approvals of the transaction on the proposed terms and schedule; the failure of NYSE members or Archipelago shareholders to approve the transaction; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; social and political conditions such as war, political unrest or terrorism; general economic conditions and normal business uncertainty.
Additional risks and factors are identified in Archipelago's filings with the Securities Exchange Commission, including its Report on Form 10-K for the fiscal year ending December 31, 2004 which is available on Archipelago's website at http://www.Archipelago.com , and the Registration Statement on Form S-4 filed by NYSE Group, Inc. with the SEC on July 21, 2005 (and amended on September 24, 2005, October 24, 2005 and November 3, 2005).
You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. Except for any obligation to disclose material information under the Federal securities laws, none of the NYSE, Archipelago or the combined company after the completion of the transactions undertake any obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this document.