Business Insight Zone

Private companies sometimes trade shares, too, just not . . . publicly. Lately, several prominent financial companies have set up exchanges for private stocks: Goldman Sachs, JPMorgan Chase, and Bear Stearns each runs its own exchange. Earlier this week, a consortium of big financial houses — Citigroup, Lehman Brothers, Merrill Lynch, Morgan Stanley, and Bank of New York Mellon — announced that they would run a joint exchange called Opus-5 (for “Open Platform for Unregistered Securities”). This was matched by the announcement that Nasdaq would likewise open a private-stock exchange called the Portal Market.

Don’t be surprised if the new exchanges — especially Nasdaq’s — eventually replace the ones run by individual banks. In general, these exchanges should improve liquidity for private companies, which sometimes find it hard to bring in new investors, but they shouldn’t have much impact on individual investors, since only big-money outfits like hedge funds are invited to play with the private exchanges.