NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) shares fell 13 percent Tuesday afternoon after it announced that it would acquire the electronic Treasury trading platform eSpeed. News of the acquisition comes about a month after NASDAQ announced it would team up with SharesPost to create a new exchange for unlisted companies. The deal is worth a total of $750 million in cash and a trade of 15 million common shares over a span of 15 years.
The acquisition of eSpeed will enable the company to enter the electronic fixed income business, and NASDAQ’s CEO said it was a bet on what the Fed will continue doing in the markets. CEO Robert Greifeld appeared on CNBC’s Squawk Box on Tuesday, and he called his company’s $750 million deal for eSpeed “a bet that the federal government will keep maxing out the nation’s credit card.” He went on to say that because of how much more money the government spends than it takes in it will need to raise money through the treasury market.
Today’s fall in NASDAQ OMX Group, Inc. (NASDAQ:NDAQ)’s share price is the most since 2011. Investors are likely concerned about the company’s credit rating after the sale. Bloomberg reports that Moody’s Investors Service and Standard & Poor’s warned that they may lower NASDAQ’s debt rating.
One analyst told Bloomberg that the acquisition of eSpeed will limit NASDAQ’s ability to do various things like buy back its stock. So while the acquisition may be good for NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) in the long term, its finances may be a little shaky in the near term.
