Boom Times for the Big Board?

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Lots of Uncertainties

Finally, investors are pleased that Thain is also willing to diversify the mix of products that the NYSE handles. The exchange intends to build its bond-trading operation for corporate bonds. And it's looking into futures, a move that could put it in competition with the Chicago futures exchanges—the Chicago Mercantile Exchange (CME) and Chicago Board of Trade (BOT)—which themselves are planning to merge (see BusinessWeek.com, 10/17/06, "The Merc and the CBOT: Together at Last").

Still, with so many uncertainties, few analysts would be surprised to see NYSE shares retrench from the latest high before going still higher. Some are nervous about the sustainability of the current price.

"The stock has run so fast," says Richard Repetto of Sandler O'Neill, who has had a "hold" rating on the shares since the Euronext deal was announced. While he's optimistic about the NYSE's prospects, he frets that much of the latest rise is being "driven by retail" investors instead of institutional traders.

Been There Before

The NYSE's Nov. 10 surge lifted other exchanges, with rival Nasdaq Stock Market (NDAQ) gaining 4.9%, to $37.79, and International Securities Exchange Holdings (ISE), which handles options trading, rising 4.8%, to $48.31. Amid Cramer's pronouncement, Thain and other exchange officials have been generating news this week at the meeting of the Securities Industry & Financial Markets Assn. in Florida.

Certainly, volatility is nothing new for the NYSE stock. On the day it went public through its merger with publicly traded Archipelago last March, the stock price soared from $67 at the opening to $80. It has since fallen as low as $50. The shares could easily dip again before hitting the lofty price that Mad Money host Cramer thinks they could be worth.

Weber is BusinessWeek's chief of correspondents.