Borse Dubai intends to sell part of its Nasdaq stake for billions

The largest shareholder in the Nasdaq stock index, a sovereign wealth fund based in Dubai, intends to divest one-third of its shares in the exchange.

The value of the company dropped in aftermarket trade on Wednesday as a result of a Dubai sovereign wealth fund, which is the single-largest shareholder in the Nasdaq stock index, deciding to sell a third of its shares in the exchange. The transaction might be worth up to $1.6 billion.

Dubai-owned Borse Dubai has declared its intention to become the second-largest shareholder in the US technology-heavy Nasdaq index. The investment corporation sold 26.9 million shares in the Borse Dubai transaction, with a possible value of $1.6 billion. Borse Dubai will retain about 10.8% of Nasdaq shares. Nasdaq share prices decreased 2.6% in after-market trade, slightly above $60 per share.

In 2007, Nasdaq granted Borse Dubai authority over OMX, Sweden's top stock market, in exchange for 20% of the exchange. Borse Dubai became the London Stock Exchange's largest stakeholder, acquiring 28% of the LSE. In 2015, Borse Dubai divested all its LSE shares. The Nasdaq Dubai exchange, launched in 2005, replaced the Dubai Financial Market (DFM) with equities listed in US dollars. However, Nasdaq Dubai has not gained popularity. In recent years, Dubai has seen several initial public offerings (IPOs) of state-owned companies, including Emirates, FlyDubai, and other $320 billion ventures owned by the Investment Corp. of Dubai.