Toronto Stock Exchange owner TMX Group Ltd. is considering what to do next with Box, its slumping U.S. options exchange.
"Like every other asset around our portfolio, if we don't think we can make it a growing, profitable business then we'll have to look at alternatives," TMX Chief Executive Officer Lou Eccleston said Thursday while discussing the Toronto-based company's second-quarter results. "We're watching it very closely."
Eccleston's already jettisoned part of TMX since taking the CEO job in November, selling its Equicom Group investor- relations unit to National Public Relations in July for an undisclosed amount. Box's share of U.S. stock-options trading dwindled to 2.4 percent in July from 2.8 percent a year earlier, according to data compiled by Options Clearing Corp.
Edward Boyle, the CEO of Box, declined to comment. Shane Quinn, a TMX spokesman, said the "alternatives" include "initiatives to increase trading activity on Box as we have spoken about in the past, such as exploring incentives for liquidity providers including potential ownership interest."
TMX, which is the biggest operator of stock exchanges in Canada, owns 56.2 percent of Box. The rest is controlled by a group of broker-dealers.
Michael Ptasznik, TMX's chief financial officer, disclosed Thursday that Box's revenue dropped during the second quarter due to a 19 percent decrease in volume. The options market in January began offering incentives to participants for providing liquidity, a move that has yet to result in any "significant change in volume," he said.
Shares of TMX fell 2.5 percent to C$48.67 at 11:02 a.m. Toronto time Thursday. The company's adjusted second-quarter earnings fell short of analysts' estimates.