How much is NYSE really worth?

What's the New York Stock Exchange worth these days without Euronext NV, the pan-European market that it bought last year to form NYSE Euronext? Not all that much, based on a comparison of market values.

NYSE Euronext, which said yesterday that first-quarter earnings more than tripled amid record trading, was valued at $19.4 billion at yesterday's close.

That was only $3.2 billion more than Euronext, the owner of stock exchanges in Amsterdam, Brussels, Lisbon and Paris, whose shares still trade publicly.

Euronext had a higher value earlier in the year. The gap between the company, based in Amsterdam, and its New York-based parent company peaked on March 17 at $1.3 billion, according to data compiled by Bloomberg.

This anomaly results from NYSE Euronext's cash offer to purchase all the unit's shares it doesn't already own for 94.05 euros apiece, the price of last year's successful cash-and-stock bid.

The proposal was filed with the Amsterdam Court of Appeals last June. Euronext closed at 92.2 euros on Tuesday.

During the 1990s Internet bubble, pro-forma earnings reports became a trend because the companies that gave them looked better than they would have otherwise.

The latest pro-forma numbers from Idearc Inc, a stand-alone company for just 18 months, are at odds with that pattern.

Idearc, a phone-directory publisher that Verizon Communications Inc spun off, said first-quarter net income dropped 2.5 percent after adjusting for costs related to the split. The decline contrasted with 7.8 percent growth before setting aside those expenses.

Earnings before interest, taxes, depreciation and amortization, a gauge of the amount of funds available for paying debt, slid 3.2 percent on an adjusted pro-forma basis. The unadjusted number rose 1.4 percent.

The bottom-line figures triggered a 46 percent surge in Idearc, the stock's biggest one-day advance on record. The pro-forma numbers indicate the Dallas-based company, hurt by a shift to online Yellow Pages, may be hard pressed to add to that gain.

David Wilson is a Bloomberg News columnist. The opinions expressed are his own.

(China Daily 05/08/2008 page17)