On August 1, David Schwimmer, a long time veteran from Goldman Sachs begins his CEO role at the London Stock Exchange (LSE)
On August 2nd , both companies will report and host earnings calls and the outcome from the results will almost certainly affect their market cap race. To be fair, MSCI is up 35% this year and LSE is up 18% so there is a lot of optimism for the U.S. contender.
Last week MSCI’s stock hit an all time high of $176.88, but ETF historians may recall that on October 2, 2012 MSCI stock was rocked down 30% to about $10 a share because of Vanguard’s decision to change to the FTSE index. Beyond the temporary loss of market cap, arguably this was also an important date because it was the start of the price war. While we don’t pass judgement on this move, we do like to see the U.S. underdog win. We also have to admit that the decision by the 217 Year Old London Stock Exchange to buy the U.S. Russell Index in July 2014 for $2.7 Billion is a motivating factor for our opinion. We are rooting for MSCI in this race, but our hopes are irrelevant. Smart investor vote with their pocket books not with their emotions.