The ICE man cometh

  @FortuneMagazine December 5, 2013: 6:53 AM ET
ICE23 jeffrey sprecher

Sprecher and Loeffler at their house in Atlanta


The New York Stock Exchange, an icon for two centuries, has just been acquired by an upstart exchange and clearinghouse company carrying the cool name of ICE (for IntercontinentalExchange). The company's founder and CEO, generally a cool customer himself, is an electronic-trading entrepreneur and visionary, Jeffrey Sprecher, 58. Starting ICE 13 years ago in Atlanta, he built it into a lean, cost-conscious company that in 2012 had $1.4 billion in revenue, a splendid $550 million in profit, and a pre-deal market value of $9.3 billion. His very tall and striking wife, Kelly Loeffler, 43, has ridden shotgun on most of this trip. She's a part of the ICE management team, in charge of marketing, communications, and investor relations. Since Nov. 13, when Sprecher (rhymes with "trekker") closed his improbable deal and took over NYSE and its parent, NYSE Euronext, Loeffler has picked up the same jobs in the combined company.

And oh, yes, NYSE Euronext, whose 2012 revenues were $3.7 billion and its profits a bare $350 million, is not just the New York Stock Exchange. It's also four Euronext stock exchanges in Amsterdam, Brussels, Lisbon, and Paris that ICE plans to sell or spin off, and it is additionally a European derivatives exchange called Liffe (pronounced "life") that Sprecher had long coveted and hopes to turn into a jewel. For the entirety of NYSE Euronext -- ticker symbol: NYX -- ICE paid $8.2 billion in cash and stock, about 40% above the company's market value just before the ICE deal was announced, in late 2012. After that, as the acquisition ran regulatory hurdles, the strong 2013 stock market propelled ICE, and NYX with it, to a combined market value of almost $25 billion.

But with the opening bell rung and the celebrations ended, now comes the hard work and uncertain outcome that Sprecher knew the Big Board would pile on ICE. The problem he has comes courtesy of the Securities and Exchange Commission, which in the late 1990s and 2000s chose to encourage competition in the equities markets by liberalizing its rules as to how stocks could be bought and sold. Traders responded as capitalists do, turning the market into kind of a wild thing offering more stores and cut-rate prices. Today the New York Stock Exchange, once the default destination for anyone trading its famed stocks, is staring at about 250 competitive venues busting to do the job. Many of these sites are lower cost than the exchange, and some -- bearing the sinister-sounding name of "dark pools" -- actually profess to deliver better executions of trades because they operate out of the public eye, removed from the bright lights of the exchange.

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