After nearly 214 years as a not-for-profit exchange, the Big Board has transformed itself into a public company after closing its $10 billion acquisition of electronic rival Archipelago Holdings Inc. the day before.

The new NYSE Group Inc. began trading under the ticker symbol NYX on Wednesday. Its new equity, the majority of which is still held by the NYSE's former seat holders, will help the exchange expand into new businesses, such as derivatives trading, and could fund acquisitions as well.

CEO John Thain and other exchange officials, who usually accompany the executives of NYSE-listed companies during the ringing of the opening bell, rang it themselves on Wednesday to mark the start of NYSE Group trading. On the floor of the Big Board, traders also rang little bells.

NYSE Group shares jumped to $70 in the opening minutes of trading on the NYSE, up more than $5.75 from Archipelago's closing price of $64.25 on Tuesday.

The NYSE and Archipelago will continue to operate separately under the NYSE Group umbrella, at least for a short time. Eventually, the exchange hopes to allow its floor traders access to the Arca electronic trading platform, which would give them the ability to trade Nasdaq-listed stocks as well as equity options.

Thain, who will continue as CEO of NYSE Group Inc., shocked seat owners and floor traders when he announced the Archipelago deal on 20 April 2005. Thain, who took over the job in early 2004, had said the NYSE was interested in going public, but also had said he expected the process to take far longer.

Top executive

The NYSE plan to go public was
made known in early 2004

Goldman Sachs Group Inc., where Thain served as a top executive prior to joining the NYSE, served as the adviser to both the NYSE and Archipelago. While not unheard of, Goldman's role prompted a group of seat holders to file suit against the NYSE, saying the deal undervalued the Big Board. That suit was settled on 15 November after Citigroup issued a separate fairness opinion on the deal.

Under the final agreement, owners of the 1,366 seats on the NYSE received 80,177 shares of NYSE Group stock plus $300,000 in cash and another $70,571 in dividends. At Archipelago's Tuesday's closing price of $64.25, the deal valued each seat at approximately $5.5 million. One third of the seat holders' stock can be sold in a secondary offering set for April or May, with the other two thirds locked up for another one to two years.

Archipelago shareholders, who saw the value of their stock jump from $16.90 before the announcement last year, will trade their Arca shares for NYSE Group stock on a one-for-one basis.

Now that the exchange is public, Thain hopes to expand trading in corporate bonds and equity options, and has repeatedly said the NYSE will look at acquiring other exchanges or markets, both in the United States and abroad.