The speculation on an NYX NMX takeover is confirmed. It is not a matter of if it is going to happen the question is when it will happen.On the news NMX shares have jumped significantly in the past few days. However, during the same period (NYX)NYSE EURONEXT has had considerably less impressive gains. In fact, Jim Cramers stock of the year NYX, has been Cramers biggest headache of the year.Cramer recommended NYX earlier this year and it has gone from par to under $70 a share. While NMX holders are rejoicing in the news, some NYX shareholders are concerned that this deal could in the short term drive prices even further down.
Nymex (NMX) has everything to gain from this deal. First and foremost this will promote NYMEX's proliferation of the European markets. Also, this deal also means that NYMEX will be organizing itself in to a much more efficient and profitable exchange. There are plans to lay off 150 employees (1/3 of their workforce) and to sell their New York headquarters. The NYMEX building is estimated to be worth some $500M. The company has said that this quarter it had significantly lowered expenses and would continue doing so. Many analysts are saying that the NMX stock price is about to make major moves. Yet, can the same be said for NYSE EURONEXT?
NYSE EURONEXT (NYX) has had mixed responses to the news. Some believe that the deal is coming to soon. Others beleive that in the short term this will dilute an already diluted stock. "NYX does not need to buy NMX now, nor will it as NMX is going after its own acquisitions for the time being. NYX needs to prove itself to the street,".
However, the majority of investors agree that this is a historical deal that will ensure NYSE EURONEXT's dominance as the leader in world exchange. For some the deal could not come any sooner. They think that this could give NYSE EURONEXT the momentum that it so desperately needs.Many people behind the scenes have rumored that we will absolutely see a deal before this October. It could come any day now.
SO in the end it seems as though everyone will be happy. NYMEX will probably make many investors rich shortly. For NYX shareholders, even if the price goes down in the short term, this deal will definitely make NYX even more of a long term success story.However, dont be fooled NYX is way overdue for major moves. NYX will also soon have its day in the sun.
cited
http://echotoall.com/blog/2007/07/31/how-to-value-the-nyx/
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