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?
How can an exchange even have stocks for sell?
How do they profit? What will MS gain from it?
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.
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.
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.
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.
> What will MS gain from it?
I think this is an interesting question. It has been a minute since I worked in this field so my info may be out of date.
My understanding is the LSE runs on MelliniumIT's trading Engine and this is UNIX based?
One would think MS is looking for a way to market its cloud. "LSE runs on Azure and you should too" but in the case of the most valuable component (the matching engine) - I believe it runs on something like RedHat?
So perhaps MSs spin will be "we love Redhat as well and LSE runs on our RHEL servers?"
When MS bought HoTMaiL, it was running on Unix. So, MS forced them to switch to Windows. And the service failed. So MS doubled the number of computers to throw at the problem, and forced them again. And failed again. And MS doubled the number of computers to through at the problem again, and finally HoTMaiL was now a turd but it wasn't completely totally dead.
Which meant that MS won and Unix lost. It didn't matter how much it cost or who they hurt in the process, they made that dog talk.
Same shit, different year.
LSEG, ICE, NASDAQ also have major data and software businesses that generate significant revenues.
Tip for understanding finance: replace every occurrence of “share”, “instrument” and “security” with “apples”
i would guess it is strange. Microsoft isn't a holding company like Berkshire is, and i would imagine that the decision to invest in equities should be made separately by shareholders themselves, instead of having microsoft make the choice.
Unless if the equity purchase has business synergy to microsoft's existing businesses, i don't see why they did it.