gbh & all: Because the CNBC Transcript was so difficult to read (all in one run-on paragraph with typos, etc., I tried to make some sense out of it and reformatted it so it can at least be understood.
Did anybody else see this? Comments?
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CNBC Transcript of 10/29 Knight Story
(A post from RB courtesy of Jim J)
This is from the closed captioning and I didn't take the time to correct the obvious typos.
Sue: Investors who use computers to make their trades have a large and growing variety of firms to choose from. But those firms rely on a company called Knight-Trimark. That's become on-line's main line. Knight-Trimark handles nearly half of all on-line trades, making it the largest trading company in America in share volume. More from jim paymar.,.
From the sleek glass skyscraper on wall street west in jersey city, Ken Pasternak CEO Knight Trimark securities views Wallstreet to the east in New York ponders his company is planning at heart of world financial marketplace:
We started to see the early 90s dramatic effect, of PC based trading.
Knight saw high volume electronic on-line trading was the future, Ameritrade E.Trade Waterhouse became backers in the venture.
We knew from our experiences with PC based investors, that they valued 3 things: 1) Immediacy 2) lower end cost 3) providing guaranteed liquidity at unit of trading. Knight averages 350,000 stock trades in about 300 million shares traded a day. But this computer mega-room can handle 1.25 Million trades and a billion shares a day. What investment are we talking about.
We spent by year spend have spent 50 million dollars on hardware in this room alone.
Here is how Knight works: You sit at computer put in a buy order with on-line broker, the trade order is routed to Knight. Knight matches that buyer to a seller if a seller can't be found Knight provides the shares themselves to consummate the trade. The buyer at home gets an execution confirmation from their on-line broker and it all happens in under 3 seconds.
We are passing probably excess of 10 billion dollars securities through Knight /Trimark exchange.
The growth has been nothing short of phenomenal. Today, Knight trades more shares than Chicago and American stock exchanges combined and trails only the NYSE and the NASDAQ, in share volume.
I think they can continue to gain some market share, especially considering that the full service brokers are going to move into the on-line trading world. Knight share value rocketed from 3 to 81 dollars but has -- imploded into 20s.
First quarter social second quarter so good, it I think investors extrapolate that I think many analysts did as well in earnings estimates and just truly wasn't sustainable environment. So third quarter came crashing back to earth.
We saw rates moderate again to historic growth rates, that we have always enjoyed: 100%. So i think both analysts and the management here, again are quite pleased that we still maintain 100% year-over-year growth rates on volume.
And volume is what Knight is all about. The company traded 55 billion shares, so far this year. Double the volume last year, and now executes 40% of all on-line trades. Average revenue 6 mills.
6/10 Of a penny seems mip is kuehl but multiplied by Knight 's incredible volume you get 500 -- 544 million dollars revenues first nine months of the year and net income of 109 million.
We have been able to do our business, on a scale that no one else has been able to achieve. We do more transactions than anyone else by a lot.
The scale according to Knight is tipping their way. In the world of US. Securities, we could achieve a 20% plus market share. We hope we could get there within 3 to 5 years.
The explosion in on-line investing worldwide driving future growth.
Most experts think we could go 25230 million on-line invests sbrifts 2002. Addition to that, the foreign component has nobody enstated to measure that. If you look at the far east, and Europe, you certainly can create an online population that potentially would be in excess of 50 million investors. So we are starting to think about transactions in millions. Per day.
Jim: And Knight has big plans to expand their electronic trading operations around the globe, first to Europe, then to Asia. The company already owns a 19% stake in Easdaq, which hopes to become Europe's NASDAQ. Knight also intends to acquire an options market maker, a natural extension of its trading business, which could generate anywhere between a 250-500 million to top-line growth, making Knight a billion dollar company after only four years in business.
If you have Real Player you can listen and view the whole thing here realtimequotes.org (Scroll down to the last entry) |
