Comparison Of Nyse And Nasdaq, Including The Effect Martha Stewart's Conviction Had On Martha Stewart Living Omnimedia.

947 words - 4 pages

The New York Stock Exchange (NYSE) is the most technologically advanced equities market in the world. It is an order driven market run by a single market maker called a specialist. The market is created by participant such as listed companies, individual investors, and member firms. Buyers and Sellers meet on the floor of the exchange, open, fair, and orderly, to get the best price based on supply and demand. There is a single limit order book where public limit orders are stored until they can be executed or are canceled by the submitter. The limit order book is maintained by the specialist. NYSE specialists have a number of affirmative obligations but are not required to maintain a continuous market where price movements should occur smoothly rather than in large jumps. Additionally, NYSE specialists are required to be supply liquidity when no one else wishes to. Both of these features may serve as "shock absorbers" when public supplied liquidity is thin. On an average day, 1.46 billion shares are traded on the NYSE which are valued at $46.1 billion. The NYSE was the most competitive market in 2004 for trading its listed stocks which provides investors with the lowest costs, deepest liquidity, and best prices.In contrast to the NYSE, NASDAQ is largely a quote driven market without any priority rules. It is also the largest U.S. electronic stock market. NASDAQ lists more companies and, on average, trades more shares per day than any other U.S. market with approximately 3,300 companies. It is home to category-defining companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. NASDAQ is the primary market for trading NASDAQ-listed stocks. Approximately 54% of NASDAQ-listed shares traded are reported to NASDAQ systems. Competing market makers, or dealers, establish quotes for the stocks they make markets in. In contrast to NYSE specialists, Nasdaq dealers have no affirmative obligations. In addition to dealers there are a number of alternative trading systems that also compete with dealer quotes by exposing public limit orders to the market. Again, these public limit orders have no affirmative obligations to supply liquidity or maintain an orderly market.How has Martha Stewart's conviction affected her company, Martha Stewart Living Omnimedia, Inc., in each of its four segments: Publishing, Television, Merchandising and Internet/Direct Commerce? According to the Fourth Quarter 2004 Results found on MSLO's website, Publishing Revenues were $26.1 million in the fourth quarter of 2004. This is down $7 million from the $33.1 million in the fourth quarter of 2003. In the fourth quarter of 2003, MSLO had an operating income of $0.4 million. Unfortunately, the fourth quarter of 2004 reflected an operating loss of $11.3 million. The announcement states that "the loss for the quarter is due mainly to a decline in advertising revenue in Martha Stewart...

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