A prestigious seat on the New York Stock Exchange is rapidly losing value – as much as a $7,500 a day.
Sales of three seats yesterday fetched far less than a seat sold for just four weeks ago, according to exchange data.
A seat bought by an unidentified investor near the close of Big Board trading brought $1.25 million for its seller, whose name wasn’t disclosed.
The price was nearly 11 percent lower than the $1.4 million that was fetched on July 8 – and a whopping 47 percent lower than the all-time high for a seat of $2.65 million on Aug. 23, 1999 at the dot-com boom peak.
Industry experts blame the drop on slower volume on the exchange which shrinks fees.
Thinner spreads between the bid and ask prices for stocks traded have also become troublesome for seat owners, as well as the reluctance of entrepreneurs to take a costly plunge on a seat.
The number of seats on the exchange is fixed at 1,366, with each seat largely a license to make money on every stock traded on the exchange, plus other investment opportunities.
In all, seats currently have a market value of about $1.7 billion, down from $3.6 billion at the 1999 peak.
Some investors believe the proposed phase-out of historical floor trading by hand in favor of an all-electronic trading system could limit the potential for some seat owners to find trading profit growth.
The new electronic system, however, would equip seat owners with full capabilities to do trades electronically. The new system might also change some of the controversial practices of floor specialists.