Tuesday, March 30, 2010

NYSE Euronext How $NYX Could Get to $1 Billion Tech Opportunity NYX

NYX's new strategy to grow its technology business to $1 billion in revenue is achievable, in our view. Market participants see value in NYX's offering and it has a first mover advantage. Opportunities we are able to model can take it to ~$860mm in revenue by '15(other revenues in the tech business could close the gap to the $1B, but we do not yet have enough information to analyze them). If NYX can meet its goal, our NPVanalysis suggests $5-6 of additional value today. However, we do not yet include the upside as there are significant execution, pricing and demand hurdles. A new series of reports: The exchange business models in flux. Regulatory change, technological innovation, and other factors are driving shifts in market structure and the exchanges are adapting.
What will the best-in-class exchanges look like? What will growth look like? How will exchanges generate a return? We intend to explore such questions in a series of reports entitled The Evolving Exchange Business Model, beginning with this one.

NYSE EuronextThe Evolving ExchangeBusiness Model How NYXCould Get to 1 Billion TechOpportunity

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