BlackRock and Citadel's Texas Stock Exchange Disruption

BlackRock and Citadel Securities aim to create a new stock exchange in Texas, challenging the dominance of Wall Street.

### BlackRock and Citadel Securities Team Up to Create a Major Wall Street Challenger in Texas
* 💰  BlackRock and Citadel Securities have raised **$120 million for the Texas Stock Exchange**, aiming to challenge the dominance of the **New York Stock Exchange and the NASDAQ**.
* 🗽  The New York Stock Exchange and the NASDAQ, both located in New York City, are the **largest exchanges in America and the world**, with **market concentration being inevitable**.
* 🤠  Texas, home to over **50 Fortune 500 companies** and more business-friendly than New York, is seen as an **attractive location for the new exchange**.
* 📈  The Texas Stock Exchange aims to be a **cheaper and easier way for companies to go public**, especially with the **increasing regulatory burdens and costs** of listing on major exchanges.
* 🏦  BlackRock and Citadel Securities, along with other major investors, provide **liquidity to the new market**, making it a **viable option for companies looking to go public**.
* 🌍  The new exchange could not only be popular among American companies but also attract international companies, as the lower regulatory pressures of Texas and the new exchange mean **foreign companies won't have to comply with multiple sets of rules** to get listed in America.
* 🏠  The new stock exchange could bring a **huge influx of high-paying jobs** to Texas, but there are concerns that it may further accelerate the trend of native Texans being **priced out of their homes** by industries they don't benefit from.

last week, BlackRock, the world's largest asset manager, and Citadel Securities, the world's largest hedge fund, teamed up to make a major announcement that could reshape global financial markets. They were going to team up to create a new Wall Street in Texas. These two companies have the financial muscle to make the Texas Stock Exchange viable, but the question is, why? We have seen three incidents in the last week or so since T+1 was implemented. BlackRock and Citadel Securities, with the help of individual investors, have raised $120 million for the exchange with the goal of a bid for a new National Stock Exchange based in Texas. The startup exchange that will be located in Dallas is already taking shots to challenge the dominance of the New York Stock Exchange and the NASDAQ, which are both located in New York City and are by far the largest exchanges in America and also the largest exchanges in the world. Both of these incumbents are private businesses that make money by providing a place where public stocks and other financial instruments can be

traded securely. They make their money by charging companies that want to list on their exchange a one-time IPO fee and an ongoing annual fee. The New York Stock Exchange is really not much different to a farmers market where businesses will pay the market organizer for the right to sell their stuff in a place with lots of customers. The only difference is that instead of beets and artisanal honey, they are selling shares in their company. If the New York Stock Exchange is like a farmers market, then the NASDAQ is like eBay. It's still a marketplace, but it's all done online. The NYSE is owned by a company called Intercontinental Exchange, whose shares you can buy on the New York Stock Exchange. So, apart from a lot of regulatory paperwork, there is nothing too special about these companies. As long as a business gets approval from the Securities and Exchange Commission, there is nothing to stop them from establishing their own stock exchange wherever.

they want. There are already about a dozen stock 
markets operating in America already, but none have   come close to these two because companies 
want to list their shares in markets with   the most money, and investors want to put their 
money into the markets with the most companies,   so Market concentration is inevitable. The reason 
that they both happen to be located in New York   City has more to do with Legacy than any pragmatic 
benefits of operating in a state that is actually   not particularly business-friendly. So why is this 
new Challenger bucking the trend and setting up in   Texas? Well, why not Texas? Texas is currently home 
to over 50 Fortune 500 companies. It is in a more   central location between the East and West coasts 
and is much more business-friendly than New York. The New York   Times noted in their coverage of the 
story that many companies have avoided listing on   the New York exchanges because of what they call 
regulatory overreach regarding rules like board   diversity and governance. The Texas-based exchange 
will have far fewer restrictions on listed

companies. The announcement of the new exchange was so clear about this that some investors have dubbed it Texas's anti-woke exchange. You can call it what you want, but federal laws in conjunction with New York state laws and exchange laws have prevented a lot of businesses from selling their shares public. According to the economist, the number of new companies going public for the first time is on its longest cold streak since the 1980s. The continuing rise of late-stage venture capital in private equity means that unless a company is absolutely massive, the regulatory burdens and cost of listing on an exchange like the NYSE are just not worth it when they can sell private shares on secondary markets or sell the company outright to a large private equity firm. So the new Texas Stock Exchange needs to prove that it can make going public great again by being a cheaper and easier way to go public. If it can't, then it's just starting a business in a shrinking

industry currently controlled by an oligopoly. If it can, then it can reshape financial markets for the better and make Texas an even more compelling business hub. Assuming that the major financial institutions bankrolling the project don't turn it into their own financial playground, so it's time to learn how money works to find out why some of the most powerful financial institutions in the world want to build a new Wall Street in Texas. BlackRock and Citadel Securities have led a group of investors who raised approximately $20 million to start a new exchange, according to an announcement by the new company themselves. That makes the Texas Stock Exchange the most well-funded registration with the SEC ever. These companies are not playing around. BlackRock and Citadel will be giving the exchange more than just cash. As well as some of the biggest market makers in the world, they will offer liquidity to the new market to make it an enticing option for new companies looking to go public, having lower fees and fewer rules than the new.

York Stock Exchange is all well and good, but if there are no investors using the market, then no companies are going to want to list themselves there because they won't be able to get the best price for their shares. But just BlackRock alone has $9 trillion in assets under management, so even if a tiny part of the firm's operations are directed through this new exchange, that would be more than enough buying power to make the market a viable option for most companies considering to go public. Citadel Securities makes its money by trading more actively on markets. They were the biggest, baddest villains behind the initial GameStop rally. The GameStop community accused Citadel and its billionaire CEO, Ken Griffin, to be responsible for the decision to halt the buying of GameStop on Robinhood to protect their short positions. A court has since found no evidence of collusion, but many people maintain that they have the motive and the means because of how much money

they were paying Robin Hood. They were Robin Hood's biggest customer, paying for order flow where Robin Hood would let Citadel buy and sell shares as a counterparty to retail traders instead of going through the stock exchange itself. My friend Richard from the Plain Bagel made a great video on dark and how they work last week, which you should check out after this video if you want more details. For now, all you need to know is that this allowed Citadel to profit off retail trades by making the difference between the buy and the sell spread on millions of transactions a day. This is called being a market maker. Citadel and other large trading firms like them make it easier to buy and sell assets quickly by always being there as a buyer or a seller, making a profit on both sides. Most retail traders would have never known this was happening if it wasn't for the controversy surrounding the GameStop trading halt. Anyway, as a market maker, Citadel has an incentive

to make markets, if Citadel is there from day one, to provide liquidity in these markets, then both companies and investors can be confident that the Texas Stock Exchange will be a worthwhile place to do business. For Citadel, the new Stock Exchange will be another market they can operate in to generate returns, and the more companies they get onto public markets, the more assets they will have to trade. A new major Stock Exchange in Texas could also put pressure on major incumbents, the NASDAQ and the New York Stock Exchange, to lower their listing fees and service prices to compete. Sean Tuffy said in an interview with DL news about the new stock market that two of the biggest players in US capital markets are looking to disrupt the existing exchanges because it could be good for their existing businesses to do so. It really doesn't get much more simple than that. Currently, these two major stock exchanges can basically name their prices as the only major markets not only in America but anywhere in the world, according to data from the World Federation of Exchanges.

compiled by visual capital list these two markets, have almost as much market capitalization as every other exchange on the planet combined. The new Texas Stock Exchange could prove not only to be a popular option for American companies that don't want to list in New York, it could also be a very popular option for international companies. Major companies in Europe and Asia are choosing to list in America because we have more appetite for stock market investments. 2023's biggest IPO was for the semiconductor manufacturer arm, which is a British company. According to The Observers tracking of the largest IPOs in America last year, roughly a third of them were not American companies. This matters for Texas because the lower regulatory pressures of the state and the new exchange means that foreign companies won't have to comply with four different sets of rules just to get listed in America. So that's what this move means for billionaire financiers, founders, and trillion-dollar asset managers. But what could this mean for the State of Texas? James Lee, the

founder of the new exchange drew attention to the fact that Texas is already becoming a major destination for big companies. Tesla and Hewlett Packard Enterprise have moved their headquarters to Texas in recent years, joining others like American Airlines and Exxon Mobil. Mr. Lee said in his announcement that there were also thousands of private equity-backed companies in Texas, many of which could be considering going public, which would make the TXSE the logical choice if it can achieve sufficient scale. The benefits to Texas and Dallas in particular could be a huge influx of high-paying jobs with the corporations listing and trading on these markets. That sounds great, but new high-paying jobs won't do much good for the average Texan if they are just going to be given to a fly-in finance bro from New York. According to the Federal Reserve Bank of Dallas, home prices in Texas are already some of the fastest growing in the country because of people moving from more expensive coastal cities. If this new stock exchange is successful, it is only going to

further a trend of native Texans being priced out 
of their own homes to make way for industries that   they don't really benefit from now inevitably 
the ruthless capitalism of the world's biggest   hedge fund is probably going to force this through 
locals be damned. But did you know that the first   hedge fund ever was started by a communist as a 
way to make the stock market more equal? Go and   watch my latest video on how history works to 
find out how he successfully failed at that. I   will also be writing an article on why California 
isn't being considered for a major stock exchange   despite having the world's most valuable 
companies over on my free email newsletter,   Compound at Daily. So make sure to subscribe 
to that to keep on learning how money works.

Why BlackRock is Building a New Stock Market... In Texas

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BlackRock and Citadel's Plan to Disrupt the Financial Markets

BlackRock and Citadel Securities are joining forces to establish a new stock exchange in Texas, aiming to challenge the dominance of the New York Stock Exchange and the NASDAQ.

The move is driven by Texas' business-friendly environment, central location, and the state's large number of Fortune 500 companies.

The new exchange aims to offer fewer restrictions on listed companies compared to the New York exchanges, attracting businesses that have concerns about regulatory overreach.

The Texas Stock Exchange is being backed by major financial institutions like BlackRock and Citadel Securities, making it the most well-funded SEC registration ever.

The new exchange aims to provide a cheaper and easier way for companies to go public, challenging the current oligopoly controlled by the NYSE.

By offering liquidity, lower fees, and fewer rules, it seeks to reshape the financial markets and become a compelling business hub in Texas.

The Impact of BlackRock and Citadel Securities on the Stock Market

BlackRock's $9 trillion in assets makes it a significant player in the stock market, potentially driving the success of a new exchange.

Citadel Securities, known for active trading, was involved in the GameStop trading rally and accused of halting GameStop's buying on Robinhood.

As a major market maker, Citadel profits from retail trades and plays a crucial role in facilitating quick asset transactions.

The Impact of the New Texas Stock Exchange

The Texas Stock Exchange will provide a new opportunity for companies to go public and for investors to trade, potentially challenging the dominance of the NASDAQ and the New York Stock Exchange.

The lower regulatory barriers and the appeal of the US stock market to international companies could make the new exchange attractive to both American and foreign businesses.

The initiative is not only significant for billionaire financiers and asset managers, but it also has the potential to have a meaningful impact on the State of Texas.

Texas is attracting major companies like Tesla and Hewlett Packard Enterprise, potentially bringing a wave of high-paying jobs to the state.

However, this could exacerbate the already fast-growing home prices, potentially forcing native Texans out.

The establishment of the new stock exchange in Texas may further contribute to the displacement of locals, despite the founder's vision of economic growth.