Tokenization Could Solve One Of Corporate Finance’s Oldest Problems

The conglomerate discount has survived activists, analysts, and spin-off bankers for decades. Nasdaq and NYSE may finally have the tool to kill it.

Brick facade of Amazon office building with logo, San Francisco, California, May 27, 2025. (Photo by Smith Collection/Gado/Getty Images)

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There is something deeply odd about the way we value large companies.

Amazon trades as a single security that blends three fundamentally different businesses: a retail operation grinding out thin margins in a brutally competitive market, a cloud infrastructure business that is one of the most profitable enterprises on the planet, and an advertising platform most people don’t even realize exists but that generates roughly $50 billion a year. Buy Amazon stock and you get all three, bundled together, with no ability to express a differentiated view on any one of them. The market price is almost certainly wrong for at least two of the three divisions. Possibly all three.

This is the conglomerate problem, and it is far older than Amazon. Decades of research document a persistent “conglomerate discount” — diversified firms typically trade at a 10 to 20 percent discount to the sum of their parts when those parts are valued as standalones. Activist investors have made careers arbitraging exactly this gap. The spin-off playbook — break up the conglomerate, unlock the hidden value — works because the discount is real and persistent. But activism is an expensive, adversarial, and infrequent solution to what is fundamentally a market architecture problem.

Tokenization may offer something better. And the exchanges are now moving to build it.

What Just Happened

In the span of roughly ten days last week, the two most powerful exchange operators in the world placed their bets. Nasdaq partnered with Kraken to develop a framework allowing publicly listed companies to issue blockchain-based versions of their shares while preserving traditional ownership rights. Intercontinental Exchange — the parent of the New York Stock Exchange — made a strategic investment in OKX, valuing the crypto exchange at $25 billion, and separately announced that NYSE would partner with Securitize, the BlackRock-backed tokenization specialist, to develop its Digital Trading Platform: 24/7 trading of U.S.-listed equities and ETFs, instant on-chain settlement, fractional share purchases, and stablecoin-based funding. The platform targets a late 2026 launch, pending SEC and FINRA approval.

These are not pilot programs for experimentally minded technologists. Nasdaq and NYSE are the plumbing of the American equity market. When they move, the direction of the market moves with them.

The regulatory backdrop explains why they are moving now. In December 2025, the SEC issued a landmark no-action letter to the Depository Trust Company, authorizing a three-year pilot to record Russell 1000 securities and Treasuries on approved blockchains. In January 2026, three SEC divisions jointly articulated a taxonomy for tokenized securities: tokenization changes the plumbing, not the regulatory perimeter. A security is still a security. On March 18, the SEC formally approved Nasdaq’s tokenization pilot. Meanwhile, the CFTC — moving faster than its sister agency, which is unusual — issued guidance in December 2025 permitting tokenized Treasuries and money market funds as derivatives collateral and allowing bitcoin, ether, and USDC as futures margin. Acting Chair Pham set August 2026 as the target for completing technical amendments to CFTC rules on collateral, clearing, settlement, and recordkeeping. Figure Technology Solutions filed an S-1 in November 2025 for what it describes as the first blockchain-native public equity — issued on the Provenance Blockchain, settled in self-custody wallets, bypassing DTCC entirely.

All of this happened in about four months. For securities regulation, that is a revolution.

The More Interesting Question

The regulatory action to date — and the exchange deals just announced — targets the obvious starting point: tokenizing existing, consolidated securities. A tokenized share of Amazon is still a share of Amazon. Faster settlement, 24/7 trading, fractional ownership. These are real improvements, but they are improvements to the delivery mechanism. They leave intact the underlying problem: one price for three businesses.

The more interesting application is whether the exchanges could go further — issuing tokens not on the company as a whole, but on its components.

Amazon will not do this itself. No company is going to voluntarily issue instruments that allow the market to price its divisions separately and hold divisional management publicly accountable for capital allocation. The discipline is precisely what makes it uncomfortable. But the exchanges could. Nasdaq’s new framework for issuing blockchain-based equity securities creates an architecture that, with sufficient regulatory imagination, could extend to segment-level instruments. Not a token representing Amazon, but a token representing a claim on AWS’s cash flows. Not a claim on Alphabet, but a claim on Google Search versus YouTube versus Google Cloud. The exchange designs the instrument, satisfies the SEC’s disclosure requirements for each token, and lists them for continuous trading. Amazon participates by providing the segment-level financial disclosures that token markets would demand — better disclosures than current GAAP segment reporting requires, but not a fundamentally different burden.

This matters because the conglomerate discount is, at its root, an information problem dressed up as a valuation problem. The market knows Amazon’s consolidated numbers in granular detail. It knows almost nothing, in real-time pricing terms, about the individual businesses. Segment tokens would fix that. Not by changing the corporate structure, but by changing the pricing architecture around it.

Why This Goes Beyond Valuation

The implications run deeper than better price discovery, significant as that would be.

Corporate internal capital markets — the process by which headquarters allocates capital across divisions — are among the most consequential and least transparent mechanisms in corporate finance. The academic literature finds that internal capital markets regularly misallocate capital: money flows toward divisions with political clout, not necessarily toward divisions with the highest returns. The result is value destruction that is invisible to outside investors because the segment-level data to detect it are buried in footnotes nobody reads.

Continuously traded segment tokens would change this. If AWS tokens command a substantial premium to retail tokens on a risk-adjusted basis, the signal to Amazon’s board is unambiguous. Capital is flowing the wrong way. Right now that signal lives only in analysts’ Excel models. With liquid token markets, it updates daily and is very hard to ignore.

The same logic applies to executive pay. A division manager compensated primarily in consolidated equity is being paid partly for outcomes she doesn’t control — what economists call a noisy incentive. Segment tokens offer the same solution private equity has always used: pay the head of each business in instruments tied to that business. The incentive to cross-subsidize a sister division at the expense of one’s own disappears when compensation is directly segment-specific.

M&A disclosure is another application worth thinking through. Every acquisition in history arrives with synergy projections that receive almost no market discipline at announcement and almost no rigorous accounting scrutiny afterward. If the acquiring company issues tokens on the merged entity’s component businesses, the market begins pricing synergy realization in real time. Are the relevant segment tokens moving in ways that reflect the promised savings? The accountability is continuous rather than episodic, and it cannot be managed through carefully worded earnings calls.

Finally, the debt side. Corporate credit today is priced at the consolidated entity level — a single rating applied to a firm whose divisions have very different cash flow volatility and leverage capacity. Segment-level debt tokens would allow lenders to take exactly the risk they want, priced at exactly the rate that risk deserves. A lender seeking exposure to Amazon’s subscription-like AWS revenues — which might warrant investment-grade pricing — need not accept a spread contaminated by the retail operation’s cyclicality. This is a more precise version of the conglomerate discount argument, applied to the bond market.

The Remaining Problems

The obstacles are real, and the exchange deals of last week do not dissolve them.

Segment reporting under GAAP is notoriously permissive. Companies define their segments as they please, allocate overhead with considerable discretion, and attribute shared costs in ways that can make any particular division look better or worse. Token markets would demand far more rigorous, standardized segment disclosure. The FASB is the right institution to provide it and, as I have argued before, glacially slow. The SEC may need to act instead, conditioning segment token issuance on standardized financial disclosure that goes beyond what current rules require. That is not unprecedented — the SEC has routinely imposed disclosure obligations on new instruments without waiting for the accounting standard-setters to catch up.

Liquidity fragmentation is a genuine near-term concern. Breaking a single equity into multiple segment tokens could thin the market for each, at least initially, making prices noisier rather than more informative. Figure’s design — blockchain-native stock convertible one-for-one into standard listed shares — suggests the right answer: maintain convertibility back into consolidated equity. Preserve the exit ramp. Let token liquidity build organically as markets deepen.

The legal question is the most resolved of the three. The SEC’s January taxonomy is clear: tokenized securities are securities. The exchange frameworks now being built — Nasdaq’s, NYSE’s — are being designed within that perimeter, not around it. The issue is not whether segment tokens would be regulated but whether the SEC’s emerging innovation framework is flexible enough to accommodate them. Chair Atkins has signaled interest in a regulatory sandbox for on-chain products. Segment tokens are the kind of instrument that sandbox exists to enable.

A Final Word

The conglomerate discount has survived decades of activist campaigns, sell-side sum-of-parts analysis, and spin-off waves precisely because the instruments available to investors have always been blunt. You take the whole bundle or you leave it. The corporate structure has remained essentially unchanged since the joint-stock company was invented.

What is new is that the exchanges — not crypto startups, not blockchain evangelists, but Nasdaq and the New York Stock Exchange — are building the infrastructure to change the bundle. They are doing it to reach crypto-native traders and offer 24/7 settlement. Those are perfectly good commercial reasons. But the infrastructure they are building could do something more consequential: price the pieces of complex companies continuously, impose divisional discipline that no amount of activist pressure has been able to sustain, and give investors the instruments to express views they have never been able to express before.

The technology is arriving. The regulatory framework is taking shape faster than anyone expected. The accounting infrastructure is, predictably, lagging. If the FASB can be dragged along — or bypassed — what has been a theoretical possibility in corporate finance for decades may finally become a practical one.

That would be worth more to capital markets than 24/7 trading of tokenized Amazon shares. But I will take what I can get.