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Non-Tech : Knight/Trimark Group, Inc.
KCG 20.000.0%Aug 17 5:00 PM EST
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To: puborectalis who wrote (3845)9/8/1999 11:15:00 PM
From: blankmind  Read Replies (3) of 10027
 
a few thoughts on the article:

the last paragraph was fantastic:

There's another possibility. Durante argues that what Knight has built is worth more than its current market value--and that if its stock doesn't rebound soon, it could be a perfect takeover candidate for a Merrill Lynch or Goldman Sachs.

some worry as it has been mentioned on the thread.

Since Knight's IPO, its original investors have cut their ownership from 43% in aggregate to around 30% today.

since nite only gets a penny a share from trading, and can do this at 1/200th the cost of mer, and although no longer sends a rebate back to the brokerages, they have lowered the cost per trade, and hence the companies need not send the money to nite in the first place, so nite could send it back.

The concept was brilliant, because Knight's brokerage partners had a financial incentive to send business its way. Not only did Knight pay them a rebate on the trades (an old Wall Street questionable-yet-legal tactic known as "payment for order flow"), but they also got a percentage of Knight's profits. So the better Knight did, the better they would do.

i would not be surprised if nite at some point offers a token dividend to attract long term holders of its stock.
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