Daily Dose of Optimism

Stock Exchanges as Destination Retail Shopping

This excerpt from the WSJ below on the Budapest Stock Exchange made me think about the NYSE. Although I don't think the NYSE is quite ready for retail stores, can it be that far away? - Ed

WSJ Reports: Budapest's former Stock Exchange Palace, an Art Nouveau landmark that was owned by the Hungarian government, will most likely house retail stores, offices, a boutique hotel and luxury penthouses with a view of the Danube River.

The transaction is the most recent in a string of government-owned buildings in former Soviet bloc countries that are being sold to private developers. The palace, built in 1906 in the heart of Budapest's banking district, sits on Szabadság ter, or Freedom Square, and has been home to the national television station for decades.

Toronto-based Tippin Corp. last week acquired the 500,000-square-foot building for 4.5 billion Hungarian forints, or about $21.3 million, after an 18-month bidding process that Chief Executive Michael Tippin described as onerous -- including a requirement of final approval by the Hungarian parliament. [...]

Tippin, formed in 1996, specializes in preserving architectural landmarks and profiting from them. Mr. Tippin said the buildings his company has purchased, including the Flatiron Building in Toronto, often get rents exceeding the market rate for Class A office space. Tippin intends to spend about $100 million on the palace, including acquisition price and renovations. (Feb 2006)

History of the Pink Sheets (Sat WSJ)

Great article on Pink Sheets LLC in Sat WSJ, which talks about the history and evolution of the market. Key excerpt is below, remixed for ease of reading. - Ed

Link: WSJ.com - Pink Sheets Aims For Respectability Under Ex-Trader.

Pink Sheets' roots stretch to 1904 when a Boston publisher named Arthur Elliot began distributing price quotes. In 1913, with a competitor, he formed National Quotation Bureau. More recently owned by a publisher called Commerce Clearinghouse, it resisted technology, leaving a void that was filled by the OTC Bulletin Board, a quotation service operated by Nasdaq. ...

When Mr. Coulson [the current owner of the Pink Sheets,] bought the company with some other investors in 1997, it had barely changed for decades. Then known as National Quotation Bureau Inc., it kept track of prices for thousands of stocks in otherwise unlisted companies using an archaic system that distributed prices on pink-colored sheets of paper. To make a trade, brokers had to phone each other. ...

[Pink Sheets] listings rose and fell with the Internet wave. In 1999, it got an influx of companies when a new NASD rule required financial reports from Bulletin Board companies. It got more newcomers when the Sarbanes-Oxley Act was passed by Congress, requiring more stringent corporate filings.

Mr. Coulson changed the formal name of the company, to its current Pink Sheets LLC. He put the quotes online and installed "Pink Link," a glorified email service that lets buyers and sellers communicate electronically. He moved his 35 employees into the lower Manhattan loft of a failed Internet company and painted the walls pink. He began sending Wall Street honchos pink doughnuts and cannolis with pink filling.

As it stands, the Pink Sheets is essentially a publishing company. Big investors known as "market makers," such as Knight Securities, pay Pink Sheets to list their bids and offers for their inventory of "over the counter" stocks -- those that aren't traded on national markets like the NYSE or Nasdaq Stock Market. Pink Sheets issuers aren't required to file documents with the SEC, though the market makers and brokers that provide quotes are regulated by the National Association of Securities Dealers.

Pink Sheets now exclusively quotes 4,800 issuers, including several giants that filed for bankruptcy-law protection, including Delta Air Lines. Established foreign companies like Nestlé and Volkswagen also advertise prices of their American depositary receipts on the Pink Sheets. But it is best known as home to obscure firms, like Pinelawn Cemetery, and dormant companies with minuscule revenues and stocks that barely trade.

Facts about the Pink Sheets & OTC BB

Some facts below about the commonly confused Pink Sheets and OTCBB quotation services. Inspired by the Saturday WSJ article on Pink Sheets LLC. - Ed

Link: Pink Sheets LLC - FAQ

How do the Pink Sheets differ from the OTCBB?
The Pink Sheets and the OTCBB are competing quotation services for OTC securities. The Pink Sheets is a privately owned company, while NASDAQ operates the OTCBB. Unlike the OTCBB, issuers do not have to be fully reporting companies with the Securities and Exchange Commission (SEC) to be quoted on the Pink Sheets. The Pink Sheets' OTC Dealer provides market makers with dynamic tickers and quote montages and an electronic trade negotiation system, while the OTCBB does not provide this functionality.

Who regulates the Pink Sheets?
Pink Sheets is neither a Securities and Exchange Commission (SEC) Registered Stock Exchange nor a NASD broker/dealer. Pink Sheets is considered a Non-exclusive Securities Information Processor and an Interdealer Quotation System, for which registration is not required under current securities laws. However, Pink Sheets quotation and trading system is only open to registered broker/dealers and those broker/dealers are subject to NASD Rules and regulations regarding their conduct and use of the Pink Sheets. Issuers are subject to Federal and State securities laws.