NITE among many favored......http://cbs.marketwatch.com/archive/19990831/news/current/microcap.htx?source=blq/yhoo&dist=yhoo
Also excellent slant from NITE thread....To: Douglas V. Fant (3763 )
From: Gary Korn
Thursday, Sep 2 1999 12:25PM ET
Reply # of 3768
Doug,
Reporting from the trenches (i.e., research), I've got to say that I'm very bullish about
the future. I believe that the business model is doing extremely well, and that NITE is
doing more with more clients. While the close-in quarter may not be exceptional, the
prospects for the year or two ahead are.
International
International order flow at NITE likely is still essentially zero, given that NITE just
opened its London office, but I believe that it will ramp up substantially in the year or
two ahead of us. Germany, in particular (and to a lesser extent the UK), is exploding in
on-line trading, but those markets currently are very fragmented, with a real opportunity
for a player like NITE. Without question, these markets actively are being targeted by
NITE.
Institutional
Given the liquidity that NITE provides, I would wager that we will see that institutional
order flow to NITE continues to grow rapidly. I wish the company would break down
its revenue from various segments. If it did, the growth in this segment might be
surprising.
Outsourcing
I also believe that outsourcing of market making activities has in fact happened and will
continue, particularly when decimalization hits (thin spreads will cause the more marginal
market makers to drop out of the game, abandoning still more market share to NITE).
Incidentally, the big players like Goldman, Merrill and Morgan Stanley make markets
now in perhaps only 1/3 or 1/2 of the stocks for which they used to make markets just
2 years ago. In other words, they abandoned market share to NITE.
ECNs
I continue to believe this threat is overblown. One big complaint of most market makers
is that they don't show orders until 30 seconds after they hit (unlike ECNs, which show
them immediately). Well, NITE, like an ECN, shows the orders immediately too. Unlike
an ECN, though, NITE essentially guarantees an execution (and takes market orders).
You gotta believe that NITE is selling itself as essentially an ECN-plus, that is, an ECN
with extra added benefits (the biggest one of which is sureness of an execution).
Gary Korn |
