Celebrity bell-ringers have become as essential to the life of stock exchanges as light blue coats and puzzling hand signs. The New York Stock Exchange started the trend of inviting guests to open trading in the 1980′s, when Wall Street’s stars and the corporate chiefs they supported gained national renown. Over the years, the NYSE expanded its guest list to include winning sports teams, musicians, actors, Art Buchwald–you name it.
More recently, its low-rent but flashier cousin, Nasdaq, picked up on the celebrity bell-ringing act, going so far as to build a window-encased studio, à la Total Request Live , on the ground floor of its digs at Times Square.
For a while, of course, it worked. Everybody except Warren Buffett wanted to be affiliated with technology and the Internet (Nasdaq’s bread and butter), and the exchange had its pick of celebrity bell-ringers.
The benefits were mutual. Celebrities and business executives got to bask in the tech-boom heat. And the Nasdaq supposedly picked up a bit of celebrity cachet. As Nasdaq executive vice president David Weild said, “We do hope to get interest and notoriety” from the guest appearances.
These days, though, with “tech” a dirty word and many of the 4,300 companies listed on the Nasdaq dropping faster than the Boston Red Sox, notoriety alone is often more like it.
And yet the Nasdaq under chief executive Hardwick (Wick) Simmons is sticking to its formula, regularly displaying on its giant Times Square video screen the grinning face of some C.E.O. or celebrity ringing the bell–actually, pushing the button–that launches another day of trading.
Is there a correlation between the guest bell-ringer and the market’s doings that day? Has the Nasdaq chosen its bell-ringers wisely?
Consider the bizarre scene at the corner of Broadway and 43rd Street on Thursday, Aug. 30. The Nasdaq invited Michael Jackson to ring in the day. It was Mr. Jackson’s 43rd birthday the day before, but ostensibly the goal of the invite was to cash in on the media blitz surrounding his tribute concerts at Madison Square Garden on Sept. 7 and Sept. 10, as well as the release, in October, of his first album in six years.
The event made for some awkward curbside viewing. The King of Pop shuffled uncomfortably around the Nasdaq studio, nodding diffidently at no one in particular and eating cake. He rang a bell and pushed the button, and for some reason was given a poster of Shirley Temple by Mr. Simmons. A small cadre of fawning girls, and a few young men, stood outside and occasionally squealed. (None, The Observer found, were familiar with the National Association of Securities Dealers or its mission.)
After investors got done scratching their heads and exchanging Bubbles jokes, they sent the composite index spiralling to a new low, from 1,817 at the opening to 1,791 by day’s end.
Obviously, a pop star with little remaining pop and a stock exchange with little remaining sizzle made for some bad karma.
Then again, the Nasdaq–which has been planning an I.P.O. for almost as long as Mr. Jackson has been preparing his new album–showed it still has some foresight when, on Monday, Aug. 27, it brought in the inspirational Jennifer Capriati to open trading. All sweat and no frills, she has been cracking cans of whoop-ass all over Flushing ever since.
After Ms. Capriati rang the bell, trading stayed level for the day and losses were avoided. The aptness of her appearance was not lost on Nasdaq’s executives: “She’s a woman that had a great surge early on in her career, and then just has made an absolutely extraordinary comeback,” said Mr. Weild. “And we like all that she stands for.”
The lesson for Nasdaq? Pick your talent wisely. Techno kings are going over no better than pop kings. Investors don’t want the day launched by the same people who’ve delayed their retirements and torpedoed their portfolios. Give them hard-working types and success stories–or at least a little gaiety.
And then cross your fingers.
Consider the recent record:
Mr. Jackson, it turns out, was the second bad idea last month. The first was on Aug. 1, when the chief of 3Com, the hand-held computer maker, opened trading. Apparently Wick Simmons and the boys didn’t mind that 3Com had just posted a loss of $500 million and was planning to lay off 2,000 workers. The market did mind, however: The Nasdaq lost 263 points last month, reaching depths of historic proportion.
The alternative–and it bears repeating: Capriati .
Michael Dell from Dell Computers opened trading on July 20–just as the Nasdaq-listed company was about to announce losses of $100 million. Its stock value had been halved in a matter of months, and yet Mr. Dell was looking at $23 million townhouses on the Upper East Side. Then rumors started spreading that hedge-fund manager Larry Bowman, an apparent adviser to Michael Dell, was laying eggs. So, it turns out, was the Nasdaq; it ended up losing 130 points in the month.
Felix and Concetta Grucci of the Grucci family (of New York fireworks fame), though, rang the bell on July 3. The Nasdaq closed up three points on the day. The way things are going, Nasdaq may not want to wait until next July to invite them back.
Let us say, hypothetically, that it was mid-2001 and you owned a stock exchange. What’s the last company you’d want to have ring your bell? Ding-ding-ding! You’ve got it: Worldcom.
The lumbering telecom giant had just watched its profits drop by 50 percent and was in the midst of axing 6,000 employees. And yet on June 11, Wayne Huyard, chief operating officer of Worldcom-MCI Group, came round to kick off the trading day. Was this the “notoriety” part, Mr. Weild?
You can’t get a better steak in town than at Smith & Wollensky’s. But the stock? As The Observer reported, S&W’s very own diners love the meat but were not very optimistic about the restaurant company’s prospects on the market. Yet there was Alan Stillman, ringing the bell on May 23. Today Smith & Wollensky stock, which almost reached $9 at one point, is hovering around $5. We’re not ones to say “We told you so” … but the Nasdaq dropped more than 50 points after Mr. Stillman’s appearance.
Meanwhile, one of the few dot-coms to win the branding battle was 1800flowers.com, and having its executives over on May 11 to ring in the day was a smart, tech-driven idea. The Nasdaq only lost 23 points that day–no rose garden, perhaps, but acceptable.
ADC Telecommunications. It’s a telecom company. Enough said.
However: This was also the month that featured Mayor Rudolph Giuliani and Governor George Pataki. Together. Perhaps the possibility of a political dogfight turned on restless investors, and the market posted a 74-point gain on the day.
When a company sends an e-mail to 38,000 of its employees and tells them not to come to work for a week, that might be a sign that no one from that company should be ringing any bells. (The e-mail was sent in April, but Nasdaq executives should have seen it coming.) Nonetheless, a honcho from humiliated server-maker Sun Microsystems did just that on March 20. The result? A 107-point drop.
But: The first quarter turned out to be bleak overall, so kudos to Nasdaq for trying to seek some divine intervention. We are speaking of Father Joseph O’Hare, Fordham University’s president, who rang the bell on March 19. And for the day, at least, a higher force prevailed: The Nasdaq went up 50 points.
Ameritrade? Ameritrade!? By February 2001, the term day trader commanded about as much admiration as O.J. or Condit (or Michael Jackson , for that matter). Yet on Feb. 28, an Ameritrade executive rang the bell. Perhaps it was meant as a public service–full disclosure?
In contrast, it was definitely a good idea to have Wick Simmons, newly appointed to the Nasdaq post, open trading on Feb. 1. In a weak economy, it’s important to show strong leadership skills.