Cboe eyes an HQ move

Discussion in 'Wall St. News' started by ajacobson, Feb 9, 2019.

  1. ajacobson

    ajacobson

    CORRECTED
    Cboe Global Markets is considering moving its Loop headquarters, though the Chicago Board Options Exchange parent does not plan to leave Chicago, and it would leave its trading floor where it is.

    During a conference call today with analysts about its fourth-quarter earnings release, the company's chief financial officer, Brian Schell, mentioned the possible move, without providing details. He was explaining a nearly 50 percent increase in capital expenditures forecast for this year when he referenced the possibility of the move.

    "A significant driver of the increase in our forecast is an assumption that we will spend additional capital for the possible relocation and leasing of our Chicago corporate office headquarters,” Schell said on the conference call. “We have no definitive plans to share at this point, but if we do decide to relocate, we would not expect to incur the increased capital expenditures until the second half of 2019, at which time we would likely be able to provide more clarity.”

    Cboe has cut back its Chicago workforce since its $3.2 billion merger with electronic exchange Bats, with some technological operations shifting to the onetime Bats headquarters in Lenexa, Kan. While Bats was all-electronic, Cboe still operates a few floor-trading pits.


    Cboe spokeswoman Suzanne Cosgrove said the company is "absolutely not considering relocating Cboe's headquarters outside of the Chicago area," and noted the trading floor would not leave its current location.

    But in a subsequent statement the spokeswoman backed off the part about the trading floors staying put. “We are currently evaluating all of the space in our building to determine future needs, including the trading floor,” she said in the follow-up statement. “Cboe is committed to electronic and open outcry trading, and we plan to continue providing a variety of trading solutions, as long as those solutions add value to the trading experience. The location and functionality of our trading pits will remain top of mind during this evaluation period and in the future decision we make.”

    The headquarters and trading floor are located at 400 S. LaSalle St., where the company currently has 300,000 square feet. (It also has a smaller office space in the "Four40" building next door at 440 S. LaSalle St. address, according to CoStar Group).

    CEO Ed Tilly recently consolidated power when he added the title of president after the exit last month of Chris Concannon, who had held that post and was formerly CEO of Bats.

    Cboe has been under pressure since last year because of industry questions related to its proprietary VIX volatility index and legal allegations of manipulative trading in products tied to it. Cboe’s stock has dropped by about 25 percent since reaching a high last March of $124.54. Nonetheless, the company reported today that net income rose 6 percent last year to $425.2 million, over 2017, on a 24 percent revenue rise to $2.77 billion.