NASDAQ Buys RapiData - Analyst Blog
20 Dicembre 2011 - 6:25PM
Zacks
Yesterday, global exchange operator, NASDAQ OMX Group
Inc. (NDAQ) announced the acquisition of RapiData LLC,
which offers government and economic data and news to a diverse
group of market participants in the US. However, the terms and
pricing of the deal remain undisclosed.
RapiData provides immediate access to the events regarding the
US government and economic indicators that are integrated into
algorithmic trading systems. Such news from readable-machine are
imparted to trading firms and financial institutions, who seek to
benefit from important information concerning macroeconomic factor,
risk management solutions, long-range strategies for institutional
investors as well as other liquidity opportunities and
investments.
Hence, NASDAQ will now be able to deliver important news flow
and status of key economic indicators directly from the source to
the market clients through an electronic feed system. This service
will not enhance the company’s information service efficiencies but
will also help it to be ahead of the market, thereby perking up
NASDAQ’s competitive leverage.
Additionally, the outstanding technical performance along with
the recent acquisitions have enabled the company to enter new
markets on a low cost and highly flexible platform, offering value
addition to its clients and creating additional sales
opportunities.
Particularly, the recent acquisition appears to be a meaningful
one as it will help the company’s long-term competitive growth
strategy, in its own small way, where arch-rival NYSE
Euronext Inc. (NYX) is on the verge of becoming one of the
most powerful exchanges globally.
NYSE is undergoing the regulatory approval phase of its proposed
merger with Frankfurt-based Deutsche Boerse in a $9 billion deal.
Earlier this year, even NASDAQ along with
IntercontinentalExchange Inc. (ICE) had proffered
a higher bid for acquiring NYSE, although it failed to woo NYSE and
the regulators due to antitrust and multiple other issues.
Overall, we believe that the RapiData acquisition is a realistic
and proactive approach on NASDAQ’s part. However, the company still
needs to tackle grave issues concerning the ongoing competitive
M&A activity and headwinds related to expenses, volume and
pricing continue to limit the desired upside. These limitations
reflect the pressing need to respond to the changing industry
dynamics and dig in opportunities for gaining scale.
Based on the pros and cons, currently we have maintained a
Neutral stance on NASDAQ, carrying a Zacks #3 Rank, implying a
short-term Hold recommendation.
On Monday, the shares of NASDAQ closed at $23.61, down 1.8%,
based on weak global cues.
INTERCONTINENTL (ICE): Free Stock Analysis Report
NASDAQ OMX GRP (NDAQ): Free Stock Analysis Report
NYSE EURONEXT (NYX): Free Stock Analysis Report
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