Since last summer, three separate organizations have announced plans to open a stock exchange in Dallas.
First there was the Texas Stock Exchange, which is scheduled to open early next year.
The second was the New York Stock Exchange, moving its Chicago branch to Lone Star State, making international headlines last week when he opened the door and listed Trump Media and Technology Group as its first stock.
The third is the Nasdaq, which lists more than 200 companies already based in Texas.
All of these exchanges are electronic, and it has a busy trading floor in Dallas, and no brokers screaming for numbers. But as the financial landscape changed in Texas, analysts came up with clever phrases to capture the moment. They call it the birth of “Y’all Street.”
For more analysis, the Texas standard was joined by Brent Temmel, assistant professor of economics practice at the University of Texas at San Antonio.
This transcript has been lightly edited for clarity.
Texas Standard: It appears they’ve seen a rush of businesses trying to set up these electronic exchanges in Dallas. Why is this happening now and why is it Dallas?
Bulent Temel: As Dallas and the entire Texas economy are growing rapidly, the population is growing and the consumer market is expanding. And they tend to spend money in Texas, all of which are very appealing to businesses.
Therefore, the exchange market just wants to take advantage of it and take advantage of this growth. Whichever exchange was first opened, it would gain public awareness and image as a major exchange in Dallas, Texas. And it could drive many local businesses to be listed in the exchange.
I’ve heard this is described as the advantage of the first mover.
It’s a form of it, yes, it’s similar to it.
Well, it seems like the New York Stock Exchange was the first to actually open that door, right? So, do they look like they’ll be a big winner to be this rushed first?
Potentially, yes, potentially.
What does that mean for this homemade Texas Stock Exchange?
Well, they have to compete with the New York Stock Exchange Texas. They probably should be emphasized as a way to appeal to customers to put their locality on their list, as it is good to keep in mind that it is possible for businesses to participate in multiple exchanges.
There are many companies doing that, but it can also be very expensive to do so in terms of legal documents and the various accounting standards they have to pass. Therefore, they must find a way to compete with each other.
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I’d like to go back to the big Y’all Street News last week. Trump’s media company has been listed on the Texas headquarters of the New York Stock Exchange. How do you read tea leaves? What messages and signals do you send about the developing finance industry in Dallas?
Well, it could encourage more companies to be listed. This is like a presidential approval for this newly established exchange, and it could be beneficial for all other companies to follow the lawsuit in that sense. That’s a big boost.
Is it clear who the major beneficiaries will be on all these different Texas Stock Exchanges? Are they exchanged themselves? Is it the financial industry in Texas? Is it a bank? How do you see this as affecting the Texas economy?
Many different stakeholders will benefit. Companies in the DFW region will find opportunities to acquire public listings and raise capital for free, as each IPO raises around $200 million for the company. So, it will certainly boost their growth.
Local investment banks also benefit as they charge 6% to 7% of the company’s value each time an IPO is issued. And there are many such investment banks only in the DFW area.
And of course, there are many ripple effects on side effects. Local law firms, accounting firms, all service industries, they will respond to this expansion. They will also benefit from it.
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Now, let’s take a look back at what’s going on here in Dallas, if possible, like a 40,000-foot view. We know that there are none of these trading floors like what you see on financial news networks. I think this can be set anywhere, in theory, since we’re talking about electronic exchange.
Will this change the culture of places like Dallas? Do you think it will become a financial hub? If so, what does that mean that all the transactions are being done online these days?
Of course, two stock exchanges, and even three later with the Nasdaq, joined the bandwagon, but highlights Dallas’s reputation as a financial hub. And as a result, there are many economic benefits.
But electrification is not new. Today, it has been in the US for at least a quarter century. There are seven share exchanges, five of which are already electrified due to various benefits, this form of trade-off.
Do you think Dallas actually appears as one of the five or seven financial centers in the world, if not New York, the next Seoul, the next San Francisco?
i will do it. However, not because of these exchanges, but because other factors that led to these exchanges are established here. This is because these factors are more lasting factors, such as population growth, high consumption conditions, regulatory political culture, and overall business-oriented culture. All of these are very helpful.
And of course, the state does not have corporate or personal income tax. All of these are very informative and very appealing. And for these reasons, Dallas will continue to be a major financial hub. And these two exchanges are merely the fruit of that dynamic.
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