This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Putting Your Capital on ICE

Stocks in this article: ICE NYX NDAQ

NEW YORK ( TheStreet) -- When a smaller company takes over a larger company the synergies can be exponential.

That's exactly what I'm anticipating when IntercontinentalExchange (ICE) completes its acquisition of NYSE Euronext (NYX) sometime in the second half of this year.

Earlier Tuesday, NYX reported fourth-quarter earnings that beat analyst estimates after the company cut costs. Net income fell 75% to $28 million from $110 million a year earlier, the New York-based company said in a statement. Yet, these results don't really matter as they normally would.

That's because the price of NYX shares are tied to ICE, which reports Wednesday. The analyst consensus for ICE is a drop of 1 cent per share in quarterly year-over-year earnings and a 1.6% drop in revenue. That said, the mantra on the Street is "ICE is nice because ICE is twice," meaning its impending acquisition of NYX and all its plans and benefits.

One of those benefits will include the growing value of NYX between now and when ICE completes the takeover. In a Jan. 24 interview with the Wall Street Journal, NYX CEO Duncan Niederauer revealed plans to spin off its Euronext division.

Euronext is the European electronic stock-exchange business that operates markets in Paris, Amsterdam, Brussels and Lisbon. The spinoff was outlined as part of the $8.2 billion transaction announced last month between ICE and NYX. The spinoff has an important goal.

It will, according to the newspaper, help to "...allay potential concerns that exchanges managed from afar could diminish the influence of European financial hubs, hurting their ability to control jobs and other aspects of the business."

During its conference call, NYX reiterated something first mentioned in a Jan. 31 Wall Street Journal article, that a side deal NYX reached with ICE could prevent a competing bid from arising.

Under the deal, NYSE's European derivatives unit, known as Liffe, agreed to clear its trades through IntercontinentalExchange for at least two years, the newspaper reported, citing unnamed sources. The deal will remain valid regardless of whether the merger with IntercontinentalExchange closes.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs