D Murali

Showmanship on the stock exchange

D. Murali | Updated on December 18, 2011


What was the reception that Dick Grasso, Chairman and Chief Executive of the New York Stock Exchange from 1995 to 2003, got from top technology companies in the mid-1990s? Cold, one learns from King of the Club: Richard Grasso and the survival of the New York Stock Exchange by Charles Gasparino ( >www.landmarkonthenet.com). They considered the NYSE an interloper in a world that the Nasdaq not only ruled but had also given them their start, narrates Gasparino. “Some were downright rude. Grasso fumed as executives from Intel all but laughed at his sales pitch that the NYSE and its floor could better serve a tech company’s needs.”

Grasso began to focus on marketing, and a big change was in the opening and closing bells – making them bigger and grander rather than allow them to be perfunctory affairs. A ‘wild’ idea from Robert Zito, head of marketing and PR, was to put television reporters on the floor of the exchange, something that had never before been done, not even considered, the book chronicles.

“Reporters were barely allowed in the building, much less on the floor. The reason was simple: the last thing the exchange needed was for the frat house atmosphere to be aired daily in the living rooms of investors around the globe.”

However, Grasso had already become addicted to a new genre of financial news on television and understood its power to expand the NYSE’s brand, recounts the author. “Unlike the Nasdaq, a market of anonymous traders at their computers, the NYSE had real buyers and sellers and a wonderful studio like no other in the world: the floor of the New York Stock Exchange.”

Two stations, that is, CNN and CNBC, were contacted for the purpose of floor reports, and it was the latter that showed interest; and the one to latch on to the assignment was Maria Bartiromo. As for the risks involved in giving nearly unfettered access to CNBC, Grasso was aware. Also, “the floor traders, or ‘the animals,’ as Grasso called them, were such an unruly bunch that they made the floor seem worse than the rowdiest locker room. Having someone as hot as Bartiromo down there all day would be a recipe for disaster.”

Grasso was way ahead at understanding the power of CNBC as a public-relations tool for the exchange, and by the mid-1990s, CNBC’s ratings were surging, the author notes. “Average Americans had a thirst for financial news, and now they could get it straight from the floor of the New York Stock Exchange. Add to that the images of the frenzy on the floor and the dramatic possibilities of the opening and closing bells, and you had Grasso’s vision of how to make the stock exchange the greatest show on Earth.”

Bell ringing

An interesting snatch about the ‘bells’ is that Grasso was aware of the ‘allure associated with the exchange, which was why CEOs from all over the world loved to ring the opening and closing bells.’ And he began dangling the ‘bell’ opportunity in front of companies like a piece of expensive chocolate, the book informs. “Most couldn’t resist.”

It was not unusual for the publicity stunt to get on board people who had no tangible relationship with stocks or corporate America but could generate news coverage – such as politicians, celebrities, athletes, supermodels, and even animals! For instance, “Gateway Computer was allowed to bring its mascot, a large cow, onto the floor. Grasso walked the floor with a chimpanzee as a favour to a listed company and was captured on film kissing his simian friend on the lips.” And, in what may seem a wild stretch of imagination, Grasso decided to bring an African lion to the podium when the officials of AngloGold rang the opening bell!

Even as Grasso was spending more and more of his time overseas attracting foreign listings, Nasdaq was squeezing the Silicon Valley technology corridor for every tech and dot-com IPO, the author recounts. What was Grasso’s reaction? He came back with speeches and side comments at conferences that the Nasdaq was rolling the dice with unprofitable start-ups, the so-called dot-coms, which he labelled ‘dot bombs,’ Gasparino traces.

Suggested addition to your holiday reading list, for the excitement it can recapture.


Published on December 18, 2011

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