The NASDAQ is an American based stock market which is designed especially to enable various investors to purchase stocks and sell them on a speedy and transparent computer network. It was founded by Gordon Macklin.
Makeup OF NASDAQ
Currently, the stock company has about 3200 trading companies and its trading shares takes place in different kinds of companies including:
- Consumer durables and non-durables.
- Capital goods.
- Public utility.
HISTORY OF NASDAQ
In early 1961, the S.E.C (Security and Exchange Commission) was given the go ahead to look into the reason why fragmentation was present when it came to the trading of Over the Counter stocks (OTC). In the course of the investigation, the National Association of Securities Dealers (NASD) was commissioned by the S.E.C so as to find out whether the automation process would aid in the trades’ execution.
In 1971, NASD thereby founded the National Association of Securities Dealers Automated Quotations (NASDAQ). This NASDAQ was purposed to act as some sort of exchange for the Over the Counter securities. However, all the trading transactions were carried out electronically. During the first instance, NASDAQ comprised a bulletin board kind of system. There was no actual trade taking place between sellers and buyers. Furthermore, NASDAQ aided to even out the odds for both parties by narrowing down the extent between the ask prices and the bid prices. However, various brokerage firms were against this trend since it meant that they would not earn as much as they would supposing the old business rules were followed.
In 1990, the organization became the first of its kind to leverage capital markets and introduce technology expertise all with the aim of providing better services to the clients and attract even more investors.
In 1998, the National Association of Securities Dealers Automated Quotations merged with American Stock Exchange (A.S.E) and together they formed the NASDAQ-Amex Market Group. This group became the biggest stock market to perform electronically in the United States of America in both the total amount of volume generated and the number of shares traded.
Dot Com Boom
Due to this developments, NASDAQ will adapt its system to be associated with the Dot Com bubble for generations to come. Since NASDAQ comprises of technology stocks, this factor gave way to the great rise and fall of the stock market mostly as a result of technological issues especially with big names like Oracle, Cisco, and Microsoft being in charge.
By the time we got to 2001, through a number of transactions, the Norwegian exchange known as OMX bought NASDAQ. As a result, it was renamed to NASDAQ- OMX Group. This purchase helped NASDAQ to become not only the second largest stock exchange company in the United States of America but also the fourth largest stock exchange company in the whole world.
After the transaction took place, the National Association of Securities Dealers Automated Quotations started operating in New York. NASDAQ was its own regulatory company and this allowed it to become a securities exchange with the self-regulating feature enabling it to set out its own rules and regulations for the participating parties. In the year 2005, NASDAQ began to offer public relations and = investor relations not forgetting multimedia services to the companies under them so as to improve their capital health.
In mid-2007, NASDAQ bought the Boston Stock Market. This made its client base grow even bigger as the clients of BSM were now part of the merged stock company. In 2008, the NASDAQ also bought the Philadelphia Stock Exchange. The more companies it merged with, the more clients NASDAQ attracted. It is for this reason that the firm is among the largest in the world.
In the year 2013, NASDAQ OMX Group acquired Thomson Reuters’ public relations, multimedia solutions, and investor relations businesses so as to expand its corporate solutions business. This acquisition made NASDAQ OMX Group to be the number one provider of company solutions. It extended this service to well over ten thousand clients.
In 2014, NASDAQ OMX Group rebranded back to NASDAQ. This was due to its fast growth and global recognition hence there was a need for a permanent identity to represent the brand.
In 2015, the National Association of Securities Dealers Automated Quotation acquired the analytics group and index provider Dorsey Wright and Associates.