Slumping silver and gold prices and waning investor interest have closed the nation's smallest stock exchange.
Spokane Stock Exchange operations ceased at the close of trading Friday, said Stan Covey, exchange president. Papers have been filed notifying the Securities and Exchange Commission of the closure.The 94-year-old exchange is the smallest of seven regional penny-stock markets in the country. The term penny stock refers to issues that typically sell for less than $1 per share. Companies with short or erratic histories generally issue penny stock.
Covey said the exchange's board had talked with an investment group about trying to save the market, but talks broke off this week.
"It's the general consensus in the industry that with the mining market and mining stocks, it's very hard to find anybody that's willing to step up to the plate," he told The Spokane Chronicle.
Trading volume here has declined dramatically since the $100 million peak during the wild silver years in the early 1980s. Trade volume figures were not immediately available Friday.
Covey blamed the continued slide in gold and silver prices and fading investor interest for the exchange's demise. Most of the 45 companies traded on the exchange are engaged in regional metals mining.
The number of members on the exchange declined to six from 12 last year, Covey said.
Joe Clements, an investment representative for securities firm Edward D. Jones & Co., said the closure will be a sentimental loss but will have little effect on his Spokane business.
"It's kind of unique to have a stock exchange, especially in a city the size of Spokane," he said.
Investors will be able to sell and buy the listed stocks through member brokers for a while, but transactions and prices will no longer be reported by the exchange.
Quotations will be available on NASDAQ and the New York Stock Exchange.
The exchange was established in 1897 to provide a securities market for the growing mining industry in eastern Washington and northern Idaho, which became the world's largest silver producer.
Activity on the exchange peaked in the early 1980s, when the billionaire Hunt brothers of Texas manipulated the silver market and sent prices soaring by stockpiling 42 million ounces. Sometimes, stocks worth $2 million were traded each day.
Five years later, the exchange was lucky to trade $50,000 daily.
A youthful board of directors was elected in 1985 in hopes of turning the old-timey operation into a modern, vital system for the 21st century.
Mindful of the closure of small exchanges in Denver, San Francisco and Salt Lake City, the new board tried to diversify the listings, including such non-mining enterprises as electronics companies and a savings and loan.
It moved to the Seafirst Financial Center from the old Peyton Building in 1988 in an attempt to shake an out-of-date image, and officials talked of plans for a computerized quotation system.
Long after it was fashionable or expedient, the exchange listed its stock quotations by hand on a chalkboard.
Federal rules now require an electronic computer tie-in with national quotation services so that transactions can be reported quickly, Covey said.
The high costs of such a system were too much for the small regional operation, he said.