CNBC Will Buy 12.4% Stake in Archipelago Trading
New York, Sept. 14 (Bloomberg) -- General Electric Co.'s
CNBC became the latest high-profile investor in electronic
trading, announcing it will acquire a 12.4 percent stake in the
Archipelago system.
CNBC, a business television news network, joins Merrill
Lynch & Co., Goldman Sachs Group Inc., J.P. Morgan & Co. and
others as investors in Archipelago. The trading network is
applying with the Securities and Exchange Commission to become an
independent stock exchange.
Terms of the investment weren't disclosed. Merrill, which
bought a 14.3 percent stake in Archipelago last week, invested
about $30 million, people familiar with the situation said. That
stake, along with all the other, will be diluted by the CNBC
purchase.
``The addition of CNBC to our investment group is another
important step in Archipelago's development as a national stock
exchange,' Archipelago Chief Executive Gerald Putnam said in a
statement.
Also today, Salomon Smith Barney Inc. and Morgan Stanley
Dean Witter & Co. said they're investing in Primex Trading, the
electronic auction system Bernard L. Madoff Investment Securities
is developing. Merrill and Goldman are partners in that venture
as well.
Archipelago was among the first of the new-generation
electronic communication networks, or ECNs, formed in January
1997 as the SEC introduced rules requiring Nasdaq market makers
to display their best prices. The new rules gave ECNs a national
outlet for their orders.
Archipelago handles trades of about 25 million shares a day.
It is the fourth-busiest electronic network, according to figures
supplied by electronic trading companies.
CNBC isn't the first financial media concern to bet on
electronic trading. Dow Jones & Co., a partner of CNBC in the
U.S., owns an interest in OptiMark Technologies Inc. OptiMark
operates on the Pacific Exchange and plans a Nasdaq Stock Market
system.
Bloomberg LP, parent of Bloomberg News, has its own ECN
called Tradebook. Merrill is a passive, minority investor in
Bloomberg. |
