Levitt Will Resign as Head of Amex
Arthur Levitt Jr. said Thursday that he was resigning as chairman of the American Stock Exchange after 11 years at the nation’s third-largest stock market, which has attempted to stem the loss of business to its bigger Wall Street peers by expanding into innovative securities.
Levitt, 58, said he would remain at the exchange until a successor is named, and that a search committee had been formed. He said he plans to build his 3-year-old Levitt Communications Inc. into a larger publishing company.
“I believe the American Exchange today is stronger than ever in its history,” Levitt told a news conference at the exchange in lower Manhattan. “I believe the staff is better, the quality of listed companies is stronger.”
The Amex, which caters to medium-sized companies, is far outpaced in volume by the New York Stock Exchange and the National Assn. of Securities Dealers’ over-the-counter market traded electronically nationwide.
Dates to 1790s
Trading on the Amex grew from an average daily volume of 3.9 million shares when Levitt took over in 1978 to 9.94 million shares last year, but the number of companies traded has fallen to 895 from 1,004.
The exchange dates to the 1790s, when its brokers traded unlisted securities on the streets of lower Manhattan while others moved indoors. It was the New York Curb Exchange until 1953, when its present name was adopted.
“Art has been doing this for 11 years. I think he’s accomplished the goals he set out for himself,” Jeffrey B. Lane, an Amex board member and president of Shearson Lehman Hutton Inc., said after Levitt’s announcement. “I think he’s leaving the exchange in a strong position.”
A committee of present and former members of the exchange board will choose a successor to Levitt.
Under Levitt, the Amex introduced index options, including one based on an index of foreign stocks that begins trading Friday. The Securities and Exchange Commission also has approved plans for the trading of so-called baskets of stocks on the Amex.
The exchange undertook the options innovations to open another avenue of business, although industry observers say Amex remains far behind the Chicago Board of Options in that area.
Much Smaller Volume
“I think we have carved out a very specific place in the U.S. for emerging growth companies, the mid-range companies,” Levitt said.
Average daily trading volume of the Amex’s 895 listed companies was 11.49 million in April. Average daily volume is 161.9 million shares for the NYSE’s 1,680 listed companies and 133.3 million for about 5,080 issues traded on the national over-the-counter market.
The Amex in 1988 reported net income of $2.6 million from revenue of $102.8 million, compared to profit of $8.3 million and revenue of $114.5 million in 1987, Amex’s most profitable year.
