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Message from discussion Mr. Capozza's gets it right
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damarcop...@gmail.com  
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 More options Jul 28 2008, 4:15 pm
From: damarcop...@gmail.com
Date: Mon, 28 Jul 2008 13:15:00 -0700 (PDT)
Subject: Re: Mr. Capozza's gets it right
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I understand DCF very well and other valuation  techniwues. the point
is not how much to what discount and at what rate? one cane judge very
well that the payout for the NYMEX execs was very high but furth
erprodding now the payout has been reduced to the execs and increased
to the floor members. an acquisition needs to show value in terms of
compltementary offerings, future potential etc. except for the few
cost cutting measure by moving the headquarters, retrenching employees
is not a good strategy for NYMEX (when it doing so well and is expcted
to do so). the commodities demand will be there. even if there is a
correction - there will be demand for commodities and nymex will do
well. we all can come up with fantastic numerical models with our own
assumptions to conclude whetehr the deal is under or over priced. btw,
p/e mulitples are good for wall street folks but not for shareholders
like me. When the timing was right the NYMEX execs did not act, now
they are giving a business that is doing so well. the underlying
principle of shareholder value seems to be lacing in this deal. Go
Mr.Capozza.
Ed R. wrote:
> Equity markets are priced based on discounted future cash flows. The
> US is in the biggest oil bubble they have seen in 200 years. NYMEX is
> doing between 1.1 and 1.4 million contracts a day because of the boom
> in oil prices. If this deal does not go through are you confident that
> oil will continue in a bubble for the next 4 years ? Because without
> this deal with the CME that is exactly the bet that NYMEX shareholders
> will have to make. If Nymex averages 1.3 million contracts a day for
> the month of July are you willing to bet that they will average 1.56
> million contracts a day in July of 2009 and 1.87 million contracts a
> day in 2010 ? Do you honestly believe that oil volume can grow at a
> sustained 20 to 25 % volume growth from these current oil bubble
> levels ? Because at 83 dollars a share NYMEX is currently trading at
> 33 times earnings. That is very rich. If NYMEX does not do the current
> CME deal and anything happens in the next 3 years that causes NYMEX's
> volume to stop growing at 25 % then the market will price in the
> future cash flows to the tune of about 12 to 15 times earnings and the
> stock price of NYMEX shareholders will take a huge hit. If this is
> such a bad deal for NYMEX shareholders why hasn't any other exchange
> in the world countered with a better offer ? Why ? Because no one in
> the free world believes oil volume can continue to grow at 25 % a year
> for the next 10 years. Between the cost savings between the two
> exchanges and the breadth of products these two firms would have
> together this is a fair deal for CME shareholders and a fantastic deal
> for NYMEX shareholders. Turn this deal down and I will bet everything
> I own that two years from now CME gets NYMEX much cheaper.

> damarcop...@gmail.com wrote:
> > I am with Mr.Capozza on this. The volumes are rising in NYMEX
> > platform, the revenues are ebing reported in record levels thansk to
> > the booming commodities markets which buoys the trades on NYMEX. But
> > one deosnt see the multiples EV/REV whenit comes to CME buying NYMEX.
> > I  still dont understand the logic behind this deal excpet that the
> > NYMEX senrior mgmt can make lot of dough with this sales. An anguished
> > individual investor.

> > NYMEX needs to review this deal from the value it brings to the table
> > instead of looking at the sharp in price of CME. Lets hope that DOJ
> > and SEC intervene and review this deal. Let main street make some
> > money instead of wall street for a change.

> > damarcop...@gmail.com wrote:
> > > The saga continues -> Insiders exercising their cheap options and
> > > selling the stock -> paying members less fees -> while retail
> > > shareholder like me struggle -> i still cant understand why the hurry
> > > to sell NYMEX when the whole world is screamming for lack of raw
> > > materials and commodities (which NYMEX enables to trade). SEC needs to
> > > review this proposal before CME buysNYMEX cheaply.

> > > damarcop...@gmail.com wrote:
> > > > CME's price point is too low. It grossly undervalues the market
> > > > potential. It baffles me why Nymex is budging and eager to sell - i
> > > > mean the management. Interestingly, the Nymex team has been
> > > > consistenly selling their stock since its IPO. SEC should back this
> > > > down offer and ensure that retail and individual investors like me or
> > > > protected instead of filling the coffers of the mangement.

> > > > NYMEX Shareholder


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