Also known as NASDAQ the Nasdaq Stock Market is a U.S stock exchange which is the second largest in the world in terms of market capitalization second only to the NYSE or the New York Stock Exchange which is located in the same city.
The stock exchange is owned by Nasdaq Inc. which also owns Nasdaq Nordic formerly known as OMX and Nasdaq Baltic stock market network including several American stock and options exchanges.
NASDAQ STOCK EXCHANGE-HISTORY
Founded in 1971 by the NASD or National Association of Securities Dealers, NASDAQ was, to begin with, an acronym for National Association Dealers Automated Quotations. The NASD divested itself of NASDAQ with a series of sales in 2000-01.
The NASDAQ stock market is the property of Nasdaq Inc. and is operated by the same. The Nasdaq Inc. stock was listed on its own stock exchange on July the second, 2002 as under the ticker symbol NDAQ
Nasdaq was the world’s electronic stock market and it began trading from Feb 8, 1971. To begin with, it was simply a quotation system and there was no way of performing electronic trades. The Nasdaq Stock Market was instrumental in lowering the difference between the bid price and asking price of the stock which is also known as the spread but it remained unpopular with brokerages who made much of their buck on the spread.
The Nasdaq stock market system ultimately assumed the maximum number of major trades which had been executed by OTC or the over the counter system of trading and even today many securities are still traded like this.
Till 1987 the Nasdaq exchange was still commonly known as the OTC or over the counter in media reports and monthly stock guides which were issued by Standard and Poor’s Corporation.
As time went on Nasdaq Stock Market became a regular and more traditional stock market when it added trade and volume reporting and also automated trading systems.
Nasdaq was also the first stock market in the United States of America to trade online on the net and it closed with the declaration that Nasdaq was the stock market for the next hundred years.
Many new and great companies were attracted to Nasdaq Stock Market which included Apple, Microsoft, Cisco, Oracle, and Dell, and it helped modernize the IPO.
The main index of Nasdaq is the NASDAQ Composite and it has been published regularly from its inception although the exchange-traded fund tracks the large-cap NASDAQ 100 index introduced in nineteen eighty-five with the NASDAQ 100 Financial Index which is a system of tracking the largest 100 companies in term of market capitalization.
The Nasdaq Stock Market joined with the London Stock Exchange in 1992 to form the first intercontinental linkage of the securities market. Also, the National Association of Securities Dealers turned the Nasdaq Market in 2000 thus forming a publicly-traded company.
RECENT HISTORY-2000 ONWARDS
In the year 2000, the NASDAQ composite peaked at 5,132.5 on March 10th but then it fell to 3227.0 by April 17th, and in the 30 months that followed the composite fell 78 percent from its peak.
Nasdaq Stock Market became a licensed securities exchange from just a stock market in the year 2006
Nasdaq became NASDAQ OMX Group in the year 2007 when it merged with OMX which was a leading exchange operator in the Nordic countries and thus Nasdaq expanded its global footprint.
To qualify for listing on the exchange these are the compulsory requirements:
- The company must be registered with the United States Securities and Exchange Commission (SEC),
- A company must have at least three market makers (financial firms that act as brokers or dealers for specific securities)
- The company must meet minimum requirements for assets, capital, public shares, and shareholders.
In 2011, Feb, in the wake of what was an announced merger of NYSE Euronext and Deutsche Borse there was speculation in the air that NASDAQ OMX and the ICE or the Intercontinental Exchange could make a counter bid of their own for the NYSE. The news was in the air that NASDAQ OMX could bid for NYSE’s equity business and ICE would bid for the derivatives business.
At this time the NYSE Euronext was valued at $9.75 billion and NASDAQ had a market value of $5.78 billion and ICE had a market value of $9.45 billion.
Later that month NASDAQ was considering joining hands with ICE or Chicago Mercantile Exchange to create a what would be an $11-12 billion counter bid.
In 2001, NASDAQ also purchased the EASDAQ or the European Association of Securities Dealers Automatic Quotation System, which was founded as a European equivalent to the NASDAQ stock market. The EASDAQ was now known as NASDAQ Europe. But with the burst of the dot-com bubble, all operations were shut down. In what was termed as a revival in 2007, NASDAQ Europe became Equiduct and is currently under the Borse Berlin.
Nasdaq OMX became a founding member of the UNSSE or the United Nations Sustainable Stock Exchange initiative on June 18, 2012, which was on the eve of the United Nations Conference on Sustainable Development
It was in November 2016 that NASDAQ’s COO or Chief Operating Officer who was Adena Friedman was promoted and became the CEO and she became the first woman to run a major exchange in the USA.
Nasdaq’s earnings in 2016 were $272 million which was the money it earned in listing related revenues.