October 27 in business history: a commission the rule book fixed, a stocking Japan supplied, and $35 billion paid in shares
Three 27 Octobers — London's Big Bang in 1986, nylon's announcement in 1938, and AMD's $35 billion purchase of Xilinx in 2020 — were prices quoted in a rule book, a foreign crop and the buyer's own shares, and each one changed when its currency moved.
Three 27 Octobers produced three prices that were never really quoted in dollars.
In 1986 the fee for buying a London share was written into the stock exchange's rule book. In 1938 the cost of a pair of stockings ran through a crop grown in Japan. In 2020 a $35 billion purchase was settled in the buyer's own shares.
Each number was denominated in something that could move. When it moved, the figure on the page stopped meaning what both sides had agreed.
The commission that was written in a rule book
London's stock exchange changed its rule book on the morning of Monday 27 October 1986. 1
Three rules went at once. Minimum fixed commissions on trades were abolished. The separation between brokers who advised clients and jobbers who dealt on their own book was ended. Foreign firms were allowed to own British member firms for the first time. 1
Goldman Sachs, which joined the exchange that December, adds the fourth change. A screen-based platform replaced dealing face to face on a floor. 2
The Exchange did not give up those rules freely. The Office of Fair Trading had opened a case against them, with the first hearing set for January 1984. 3
Nigel Lawson, then Chancellor, records what happened next. Chairman Nicholas Goodison offered to reform the rule book himself, and ministers accepted at the eleventh hour. 3
The floor emptied in a single morning. Alasdair Haynes, then a dealer there and later chief executive of Aquis Exchange, told the BBC: "I was used to the hustle and bustle, the crowd on the floor... And on the Monday there was no one there. There was a complete hush, it was extraordinary." 1
The ownership changed almost as fast. All 300 member firms had been British-owned. Within a year, 75 were foreign-owned and the jobbers had gone. 1
Weekly volume through the new terminals averaged more than $7.4 billion, against $4.5 billion before. 1
The twenty-year scoreboard read well. Traded shares rose from £161 billion in 1986 to £2,496 billion. Financial services went from 18 to 26 per cent of corporate tax receipts. 4
The same years were brutal on the supply side. Freed firms found they had bought far too much capacity. 1
Four old houses went: Vickers da Costa, Scrimgeour Kemp-Gee, Fielding Newson-Smith and Wood Mackenzie. Canary Wharf, built for the newly deregulated City, went bankrupt in 1992. 1
One risk went unpriced. David Willetts, then in the Downing Street policy unit, warned in a paper for Margaret Thatcher of "unethical behaviour" and of "boom and bust". He concluded there might be "individual financial failures" but not "a systemic problem". 1
Decision mirror: Europe is running the same experiment now, on the last fixed payment in the chain. Article 39a of MiFIR took effect in March 2024. 5
Germany used its national transitional option until 30 June 2026, so the ban on payment for order flow has applied in full there since 1 July. 5
BaFin's supervisory notice of 22 July 2026 set out what may replace it. Dealing on your own account as a market maker or systematic internaliser is allowed. So are product-related fees on primary-market instruments with no liquid secondary market. 5
Rebates survive only if they reach the client and nobody else. 5
For a German broker whose income was that payment, there are two routes left. It can stand as principal against its own clients, which brings position risk, capital requirements and an execution file built from data. Or it can raise the fee the client sees. 5
The stocking that was made of Japanese silk
Charles Stine of DuPont announced nylon on 27 October 1938, in a nationwide broadcast from the Herald Tribune forum in New York. 6
The company's publicity described a fibre derived from coal, water and air. 7
Eleven years of research sat behind the sentence. More than 230 chemists and engineers had worked on the project at one time or another, at a cost of $27 million. 6
The plant had been authorised fifteen days before the announcement. Seaford, Delaware, cost $8 million, one-sixth of DuPont's 1938 net earnings. It was the first plant ever designed for an operation nobody had yet run. 6
The supply arithmetic mattered more than the chemistry. Japan supplied 90 per cent of America's raw silk, and three-quarters of it went into stockings. 7
Americans bought more than 1.5 million pairs a day. Every one of them carried another country's harvest, currency and politics in its price, and in the late 1930s that country was rearming. 7
Demand was never the problem. The first public sale, in Wilmington on 24 October 1939, put 4,000 pairs on the counter and cleared them in three hours. 6
The national launch on 15 May 1940 sold nearly 800,000 pairs in a day. 6
Seven months later, four million pairs sold out in four days. By 1941 nylon held more than 30 per cent of the hosiery market. 6
Then the substitute was requisitioned. From 11 February 1942 all nylon output went to military use, and the stockings left the shops. 7
Decision mirror: Washington now pays directly for this kind of substitution. On 10 July 2025 the Pentagon agreed a ten-year price floor of $110 a kilogram for MP Materials' neodymium-praseodymium. 8
The same agreement commits the buyer to every magnet made at a second US plant for ten years after it is built. 8
The department also bought $400 million of convertible preferred at $30.03 a share, enough to make it the company's largest holder. JPMorgan and Goldman Sachs committed $1 billion of construction finance, and the capacity target is about 10,000 tonnes of magnets from 2028. 8
DuPont carried the $27 million, the $8 million plant and the risk, and kept the upside. The 2025 version moves the price risk onto the state and hands the state equity in return. 8
The purchase paid for in the buyer's own shares
AMD agreed to buy Xilinx on the morning of 27 October 2020, in an all-stock transaction it valued at $35 billion. 9
The mechanism was a fixed exchange ratio. Each Xilinx share would become 1.7234 AMD shares, worth about $143 on the day, and AMD holders would keep 74 per cent of the combined company. 9
The ratio never changed. The dollars did. The deal closed fifteen and a half months later, on 14 February 2022. 10
By then the purchase consideration was $48.8 billion. Of that, $48.5 billion was the fair value of the 429 million AMD shares issued to Xilinx holders. 11
That is 39 per cent more than the headline, without a single term reopened.
What the buyer wanted was the data centre. AMD reported $11.5 billion of revenue in the quarter to 27 June 2026, up 50 per cent. 12
The data centre segment accounted for $6.7 billion of that, 58 per cent of the company, up 107 per cent. 12
The embedded segment, where the acquired programmable-chip business sits, reported $977 million. 12
Decision mirror: the structure is still running. Palo Alto Networks completed its purchase of CyberArk on 11 February 2026, paying $45.00 in cash plus 2.2005 of its own shares for each CyberArk share. 13
The cash half is fixed the day it is signed. The share half is a claim on whatever the buyer becomes, and it is priced again every morning until closing.
Three questions for the day
- Which number in your plan is set by a rule somebody else can withdraw — a fee schedule, a licence, a subsidy, a tariff?
- Which input runs through a supplier whose politics you cannot influence, and what would a substitute cost to build before it is needed?
- If you are paying in your own shares, do you know what the price becomes if your stock moves 40 per cent before you close?
References
- 1
- 2Big Bang Deregulation Bolsters London's Position
goldmansachs.com
- 3Big Bang 20 years on
cps.org.uk
- 4The day Big Bang blasted the old boys into oblivion
independent.co.uk
- 5PFOF is gone, the conflict of interest isn't
aoshearman.com
- 6
- 7Synthetic Threads
sciencehistory.org
- 8MP Materials and the Department of Defense
mpmaterials.com
- 9AMD to Acquire Xilinx
ir.amd.com
- 10AMD Completes Acquisition of Xilinx
ir.amd.com
- 11AMD Form 10-K for 2022
sec.gov
- 12
- 13Palo Alto Networks Completes Acquisition of CyberArk
paloaltonetworks.com
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