Microsoft buys near 4% stake in London Stock Exchange
1–10 of 26 posts
Re: Microsoft buys near 4% stake in London Stock Exchange
#2Can 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?
Re: Microsoft buys near 4% stake in London Stock Exchange
#3Can 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.
Re: Microsoft buys near 4% stake in London Stock Exchange
#4Can 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?
Stock exchange is not the stock market. It is just a platform or location where stocks and other securities are traded. They provide a system where stock trades can be made.
Unlike crypto exchanges they do not even need to hold or touch the stocks.
It is a company like any other. Just that service provided is pretty rare.
Re: Microsoft buys near 4% stake in London Stock Exchange
#5Can 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?
Stock exchanges are businesses like any other (albeit heavily regulated). Their main product is a marketplace for people to buy and sell stock.
While they have many revenue streams, the typical ways they make money are through exchange fees (they charge fees for traders to buy and/or sell) and listing fees (you pay to have your stock listed). They also often sell data.
Re: Microsoft buys near 4% stake in London Stock Exchange
#6Can 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?
The exchange is also just a normal company.
For example Deutsche Börse AG is a public company, listed on their own stock exchange (Frankfurt).
Re: Microsoft buys near 4% stake in London Stock Exchange
#7Can 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”
Re: Microsoft buys near 4% stake in London Stock Exchange
#8The question is not how and what but why? Is the RoI of IT even lower than London exchange ?
Re: Microsoft buys near 4% stake in London Stock Exchange
#9The 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.
Re: Microsoft buys near 4% stake in London Stock Exchange
#10Can 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?
LSE also bought Refinitiv from Reuters few years ago.