Amid a fresh wave of merger mania among the world's exchanges, a new trend may be emerging that sees smaller as better. According to a recent Wall Street Journal article, some entrepreneurs are hoping to do to stock offerings what local farmers' markets do to grocery shopping. By creating a local stock market, Lancaster, Penn. is hoping to give companies the opportunity to raise money from local investors, rather than depending on institutionals and big banks with the creation of LanX.
The move bucks the trend that has taken place over the last few decades as exchanges have grown in size and assets. This is especially true now as a number of large mergers are in the works, most notabley the potential NYSE Euronext and Deutsche Bourse merger that would create a multi-national, intercontinental exchange.
By reverting to a local stock exchange, it gives small businesses the opportunity to raise capital while avoiding the limelight that may come from listing on a larger exchange. Further, by only offering to state residents, comanies would be able to skirt a number of SEC filing rules.
A "minicomeback" of local exchanges may be around the corner as Hawaii also is exploring the option of a local electronic stock exchange.
What are your thoughts? Do local stock exchanges have any places in the modern, global marketplace? How could they alter your trading strategy?