8-KOther Events

NASDAQ, INC. 8-K Report (Feb 22, 2002)

Filed February 22, 2002For Securities:NDAQ

Summary

On February 22, 2002, The Nasdaq Stock Market, Inc. (Nasdaq) filed an 8-K report detailing a significant transaction with the National Association of Securities Dealers, Inc. (NASD). Nasdaq entered into an agreement to repurchase approximately 33.77 million shares of its common stock from the NASD for an aggregate consideration of about $439 million. This repurchase is a crucial step in Nasdaq's ongoing restructuring efforts to achieve complete operational separation from the NASD. The transaction involves a combination of cash and newly issued Series A and Series B preferred stock, with the preferred stock structured to ensure the NASD maintains majority voting control until Nasdaq operates as a national securities exchange. The repurchase is being executed in two stages. The first stage, which closed on February 21, 2002, involved Nasdaq buying back roughly 13.46 million shares for approximately $175 million in cash. The second stage is expected to close by March 1, 2002, pending certain conditions. This move signifies a material step towards Nasdaq's independence and strategic repositioning within the financial markets.

Key Highlights

  • 1Nasdaq is repurchasing approximately 33.77 million shares of its common stock from the NASD.
  • 2The total consideration for the share repurchase is approximately $439 million.
  • 3The payment will be made through a combination of cash and newly issued Series A and Series B preferred stock.
  • 4The transaction is a key element of Nasdaq's restructuring to separate operations from the NASD.
  • 5The NASD will retain majority voting control through preferred stock until Nasdaq operates as a national securities exchange.
  • 6The repurchase is structured in two stages, with the first stage closing on February 21, 2002, and the second expected by March 1, 2002.

Frequently Asked Questions

This 8-K filing announces a definitive agreement between The Nasdaq Stock Market, Inc. (Nasdaq) and the National Association of Securities Dealers, Inc. (NASD) for Nasdaq to repurchase a significant number of its own shares from the NASD. This is a material event related to Nasdaq's restructuring and separation efforts from the NASD.

Nasdaq is financing the repurchase through a combination of cash and newly issued Series A and Series B preferred stock. This structure is designed to manage the immediate financial outlay while addressing control aspects during the transition.

The Series A and Series B preferred stock issued to the NASD is structured to ensure that the NASD retains majority voting control over Nasdaq. This control is intended to persist until Nasdaq officially commences operations as a national securities exchange, aligning with the separation strategy.

The two-stage closing indicates a phased approach to the share repurchase. The first stage has already been completed, involving a portion of the shares and cash consideration. The second stage, expected by March 1, 2002, will finalize the transaction, subject to certain conditions. This phased approach allows for a more controlled integration of the separated assets and operations.