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Microsoft buys near 4% stake in London Stock Exchange

cnbc.com

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Re: Microsoft buys near 4% stake in London Stock Exchange

#11

Post by chii »

JumpCrisscross wrote: post #3
rg111 wrote: post #2

Can someone please explain to me how can a company by stake in a stock exchange ? How can an exchange even have stocks for sell? How do they profit? What will MS gain from it?

> How do they profit? By charging trade and data fees. > What will MS gain from it? Equity exposure to those cash flows. And a strategic tie-up that complements the cloud business.

> a strategic tie-up that complements the cloud business.

it's a strange strategic tie up - i mean, it's strategic in terms of cloud business and enterprise products, but many companies buy microsoft enterprise products and services, and you don't see MS purchase equity shares of said companies.

Microsoft isn't an investment holding company - i would argue that microsoft shareholders would prefer that microsoft return capital back to shareholders, if they cannot find a suitable investment, rather than purchase equity holdings in a company that does not produce business synergy.

Re: Microsoft buys near 4% stake in London Stock Exchange

#12

Post by chii »

pharmakom wrote: post #7
rg111 wrote: post #2

Can someone please explain to me how can a company by stake in a stock exchange ? How can an exchange even have stocks for sell? How do they profit? What will MS gain from it?

Would it be so weird if Microsoft bought a % of eBay? Or Coinbase? Tip for understanding finance: replace every occurrence of “share”, “instrument” and “security” with “apples”

> Would it be so weird if Microsoft bought a % of eBay? Or Coinbase?

i would guess it is strange. Microsoft isn't a holding company like Berkshire is, and i would imagine that the decision to invest in equities should be made separately by shareholders themselves, instead of having microsoft make the choice.

Unless if the equity purchase has business synergy to microsoft's existing businesses, i don't see why they did it.

Re: Microsoft buys near 4% stake in London Stock Exchange

#14

Post by almog »

redditor98654 wrote: post #13

NASDAQ recently made the announcement to go all in on AWS, I think. I know this is not the same thing but may be something like that or a partnership of some sort is coming up?

That LSEG-MS partnership is not a speculation but a detail mentioned in the news report:

  "LSEG has a contractual agreement over the 10-year period to spend a minimum of $2.8 billion on cloud-related products with Microsoft"
I'm guessing that this 4% stake is possibly LSEG's payment to MS in equity, but it's a guess, it's not presented this way in the item.

Re: Microsoft buys near 4% stake in London Stock Exchange

#15

Post by ajoseps »

redditor98654 wrote: post #13

NASDAQ recently made the announcement to go all in on AWS, I think. I know this is not the same thing but may be something like that or a partnership of some sort is coming up?

i think the NASDAQ AWS agreement was to only move data products like historic data and maybe research clusters to the cloud. I think the exchange itself is still going to be running in the usual location.

Re: Microsoft buys near 4% stake in London Stock Exchange

#16

Post by xwolfi »

marginalia_nu wrote: post #9
ngcc_hk wrote: post #8

The question is not how and what but why? Is the RoI of IT even lower than London exchange ?

The IT business has been a bit shaky lately, so diversification makes at least some sense. Although the bigger question is why LSE, and why now? I'd imagine London to be waning as a financial center post brexit, especially given the Russian situation.

The fact it's waning makes it cheap AND have good potential for out of the box thinking. I d imagine that when on the verge of despair, they d reduce regulatory burden for instance.

I live in Hong Kong, we're waning currently, and Singapore is slowly eating our lunch, well they proposed to allow for non voting shares recently, an heresy before, to try and seduce a few IPO candidates.

Re: Microsoft buys near 4% stake in London Stock Exchange

#18

Post by meltyness »

chii wrote: post #11
JumpCrisscross wrote: post #3

Earlier quoted context omitted.

> How do they profit? By charging trade and data fees. > What will MS gain from it? Equity exposure to those cash flows. And a strategic tie-up that complements the cloud business.

> a strategic tie-up that complements the cloud business. it's a strange strategic tie up - i mean, it's strategic in terms of cloud business and enterprise products, but many companies buy microsoft enterprise products and services, and you don't see MS purchase equity shares of said companies. Microsoft isn't an investment holding company - i would argue that microsoft shareholders would prefer that microsoft retur…

They are in a position to build platforms that make cryptocurrency trading less attractive, and presumably that demand for liquid trading has to go somewhere.

Re: Microsoft buys near 4% stake in London Stock Exchange

#19

Post by techthumb »

ajoseps wrote: post #15
redditor98654 wrote: post #13

NASDAQ recently made the announcement to go all in on AWS, I think. I know this is not the same thing but may be something like that or a partnership of some sort is coming up?

i think the NASDAQ AWS agreement was to only move data products like historic data and maybe research clusters to the cloud. I think the exchange itself is still going to be running in the usual location.

NASDAQ has moved the matching engine to AWS Outposts

https://www.nasdaq.com/press-release/nasdaq-completes-migrat...

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