5 ms·

Microsoft buys near 4% stake in London Stock Exchange

46 points by almog 4y ago

ngcc_hk 4y ago
The question is not how and what but why? Is the RoI of IT even lower than London exchange ?
- marginalia_nu 4y ago
  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.
  - xwolfi 4y ago
    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.
  - faeriechangling 4y ago
    Before Brexit the LSE stood to lose a ton of value from Brexit. After Brexit the LSE stands to gain a ton of value from its eventual reversal.
rg111 4y ago
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?
- JumpCrisscross 4y ago
  > 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.
  - chii 4y ago
    > 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.
    - meltyness 4y ago
      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.
- Ekaros 4y ago
  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.
- mindvirus 4y ago
  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.
redditor98654 4y ago
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?
- almog 4y ago
  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.
- ajoseps 4y ago
  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.
  - techthumb 4y ago
    NASDAQ has moved the matching engine to AWS Outposts https://www.nasdaq.com/press-release/nasdaq-completes-migration-of-the-first-u.s.-options-market-to-aws-2022-12-05 https://www.nasdaq.com/press-release/nasdaq-completes-migrat...
    - DontchaKnowit 4y ago
      I cannot help but think this is going to end up being a huge shitshow. I hate AWS with a passion.
deleted 4y ago
[deleted]
not_gpt4 4y ago
Buying equity in your customers so they go with your cloud is a new level of embarrasing.

46 points by almog 4y ago

ngcc_hk 4y ago

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

marginalia_nu 4y ago
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.
- xwolfi 4y ago
  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.
- faeriechangling 4y ago
  Before Brexit the LSE stood to lose a ton of value from Brexit. After Brexit the LSE stands to gain a ton of value from its eventual reversal.

rg111 4y ago

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?

JumpCrisscross 4y ago
> 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.
- chii 4y ago
  > 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.
  - meltyness 4y ago
    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.
Ekaros 4y ago
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.
mindvirus 4y ago
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.

redditor98654 4y ago

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?

almog 4y ago
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.
ajoseps 4y ago
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.
- techthumb 4y ago
  NASDAQ has moved the matching engine to AWS Outposts https://www.nasdaq.com/press-release/nasdaq-completes-migration-of-the-first-u.s.-options-market-to-aws-2022-12-05 https://www.nasdaq.com/press-release/nasdaq-completes-migrat...
  - DontchaKnowit 4y ago
    I cannot help but think this is going to end up being a huge shitshow. I hate AWS with a passion.

deleted 4y ago

[deleted]

not_gpt4 4y ago

Buying equity in your customers so they go with your cloud is a new level of embarrasing.