Topline
A group backed by more than two dozen investors—including Citadel Securities and BlackRock—is planning to start its own stock exchange in Texas, it said Wednesday, in an attempt to compete with the New York Stock Exchange and Nasdaq.
Key Facts
The Texas Stock Exchange (TXSE)—owned by TXSE Group Inc. and founded in 2023, per its LinkedIn —will be a “fully electronic national securities exchange” that seeks to expand access to markets for all investors and those seeking access to public capital, according to Wednesday’s press release.
The TXSE aims to have primary listings, dual listings and exchange-traded products, according to The Wall Street Journal, which first reported the news.
The stock exchange has raised $120 million in capital and plans to register with the Securities and Exchange Commission later this year, according to the press release, while it will also have a physical headquarters in Dallas, and the company will employ about 100 people, The Dallas Morning News reported.
Crucial Quote
“Texas’s booming economy and the strong economic and population growth among states in the southeast quadrant of the U.S. present incredible opportunities for businesses — and ultimately the Texas Stock Exchange,” TXSE Group Inc. founder and CEO James Lee said in a post on LinkedIn.
Key Background
Past attempts at regional stock exchanges have failed, many of which—such as the Chicago Stock Exchange and Philadelphia Stock Exchange—have combined with the NYSE and Nasdaq, according to The Wall Street Journal. The NYSE considered relocating its electronic trading systems to the Dallas-Fort Worth area in late 2020, amid a proposed financial transaction tax on stocks in New York. But the move did not go through, nor the proposed tax,. NYSE President Stacey Cunningham wrote in a February 2021 op-ed in The Wall Street Journal that the financial industry should “stay in the Big Apple where it belongs,” but went on to say New York “needs to avoid the folly of this tax and show that it truly understands how market forces work.”
Big Number
$2.4 trillion. That’s how much Texas’ economy is worth, according to an end of first quarter 2024 report from Gov. Greg Abbott’s office, making it the eighth-largest economy in the world.
Tangent
Lee told The Wall Street Journal that the TXSE is apolitical, but the publication noted there have been rumors among traders of an “anti-woke” exchange being launched in the state. Though the company’s press release did not detail all of its investors, Citadel’s CEO Ken Griffin openly criticized “woke ideology” in Chicago’s schools in November 2022. Citadel’s global headquarters moved from Chicago to Miami in late 2022, reportedly due in part to crime rates and rising taxes. Earlier this year, Griffin stopped his donations to Harvard University and said he was worried elite students are becoming “whiny snowflakes,” also telling Bloomberg in mid-May that his endorsement of former President Donald Trump is contingent on his choice of a running mate. However, BlackRock has been viewed as “woke capitalism” by conservative groups, which have in turn targeted and attacked the company and CEO Larry Fink.
Forbes Valuation
We estimate Griffin to be worth about $32.7 billion. We estimate Fink to be worth about $1.2 billion.
Further Reading
New Texas Stock Exchange Takes Aim at New York’s Dominance (The Wall Street Journal)
BlackRock, Citadel Back Texas Stock Exchange in Challenge to NYSE (Bloomberg)
The NYSE Isn’t Moving—Yet (The Wall Street Journal)