Wall Street analysts flock to online brokerages
New York
17 JULY
THE Internet clearly has changed the way Wall Street runs its business. And now, the lure of the Web is snaring some of the men and women who are among Wall Street's most visible professionals: equity-research analysts. Online investment banks such as Wit Capital Corp.
(WITC) and E*Offering have been putting together research teams stocked with experienced analysts, giving older and more established firms some competition in the recruiting wars.
The notion of the newer online investment banks becoming a viable and attractive alternative to the traditional firms hasn't totally matured; Wall Street head-hunters don't yet see it as a major trend, but recognise the potential. ‘‘I think it's just beginning,'' Leslie Gordon, a managing director at recruitment firm Korn/Ferry International said, adding ‘‘I think it's going to take place more and more.''
Obviously, the Internet firms aren't hiring just research analysts. Seasoned investment bankers, a must-have for these companies, have come on board and junior staffers have done so as well. Wit's stable, for example, includes bankers from Salomon Smith Barney and Nationsbanc Montgomery Securities. But for investment firms, the research analyst remains perhaps the best-known face man to the public, the one who does the media rounds and who takes a stand on a stock. Among those who recently defected to online banks, two names that stand out are Jonathan Cohen, who resigned his post at Merrill Lynch & Co. (MER) in February to become director of research at Wit Capital, and Gary Craft, who left BancBoston Robertson Stephens for E*Offering in April.
Right now, it seems as if many of the analysts making the jump are those who follow technology or Internet-related companies, such as Craft and Cohen. The reason is that ‘‘these people really know and realise the potential of the Internet and are quick to jump on it,'' said Walter Cruttenden, one of the founders of E*Offering and the firm's chief executive. And for people who make a living analysing and grading Internet companies, the chance to practice what they preach can look too good to pass up.
‘‘The notion of actually executing an Internet business model, as opposed to just reporting on an Internet business model, was enormously compelling to me,'' Cohen said. Craft concurred. ‘‘I saw E*Offering as a way to put my money where my mouth was,'' he said. —
(Dow Jones )
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