"How to Make Friends and Influence People."  

[ by Howard Haykin ]

On Wednesday, the Nasdaq OMX Group said it agreed to spend the princely sum of $390 million, essentially on improving the communication skills of its executive staff, among other things.  Many traders on the street took that to mean that the Exchange would be acquiring the Dale Carnegie Training enterprise, or at least, enrolling Mr. Griefeld and his entire corp of executives in one of Carnegie's most effective programs, commonly known as "How to Make Friends and Influence People."

A Year of System Glitches and Public Relations Nightmares. 2012 has been an extraordinarily challenging year for the Nasdaq OMX Group, and in particular for its CEO, Bob Greifeld.  Topping the list of of forgettable trading sessions was the session on Friday, May 18th, which marked the highly-awaited Initial Public Offering of Facebook.  Computer glitches and personnel errors created mass confusion and led Nasdaq market makers to make duplicate share purchses of Facebook to ensure that their clients' orders were filled.  Upon later learning that the executed duplicate purchases were unnecessary, the Nasdaq market makers unloaded these shares, but incurred at a cumulative net losses exceeded $500 million.  

Nasdaq's nightmare continued weeks later when the Exchange offered to provide a $62 million compensation fund from which would be distributed to those member firms that lost money on the Facebook IPO - a figure that fell far short of the firms; total collective losses.  Nasdaq added insult to injury when it claimed that the errors or negligence of Nasdaq and its employees arose while Nasdaq operated as an exchange, which exempted Nasdaq OMX from any liabilities.  The $62 million offer was presented as a token of good faith. 

Those statements and toffers were received like a dead balloon.  Lawsuits were threatened and now 7 months later, the matter is still unresolved - it's still being reviewed by the SEC. 

How Nasdaq Really Plans to Spend its $390 Million.   In truth, Nasdaq OMX Group has agreed to buy Thomson Reuters Corp's investor relations, public relations, and multimedia services units.  The all-cash deal will add to Nasdaq's earnings within 12 months of its closing, excluding transaction-related costs, it said.  That's because Nasdaq is looking to sell additional services to companies listed on its exchanges. The company already gets more than 70% of its revenue from businesses that do not depend on transactions.

The IR, PR, and multi-media units principally help companies communicate with investors and media and create and distribute webcasts and other video presentations.  Nasdaq has a binding offer for the units, but will not enter into a definitive agreement until both companies talk to relevant unions and works councils. The deal is expected to close in the first half of 2013.

[C-I Note: Should Nasdaq find that the acquisitions do not pan out, as a fallback, it can always enroll its personnel in a Dale Carnie Training program, at a cost that's guaranteed to cost a whole lot less that $400 million.]

For further details, go to:    [Reuters, 12/12/12].