I too read the Red Herring article and developed a favorable impression of ESpeed. Unfortunately, it has been somewhat difficult getting any more information about the company since so few analysts cover it. I've gone through their website and I think their initial big opportunity is in the bond market, although they hope to expand to other financial instruments as well as non-financial items. They claim that $150 billion of transactions PER DAY flow through their systems, of which $6 billion are purely electronic with no human intermediaries. This is phenomenal; if they can just get a small transactional piece of this, their potential would be absolutely enormous. I don't fully understand their business model, but my impression is that they will start off trying to be the "ETrade" of bonds and other non-stock financial instruments. Supposedly their infrastructure is pretty advanced and they hope to spread out and use this infrastructure for other B2B markets. It seems to me though that even if they just stuck with bonds, they could make a lot of money since, as I understand, the volume of bonds traded everyday dwarfs that of stocks.
I decided to buy some ESpeed this morning as a speculative play. I keep thinking back to the $150 billion per day number. I'm thinking that this may be an undiscovered gem just ready to explode like CMRC or ARBA. I thought the following press release was pretty big. ESpeed has attracted some big names to their board. People like this don't just decide to sit on the board of any old company. I think it lends a lot of credence to the potential of this company. Hopefully I'm right.
How about some discussion on this board? Does anyone out there know more about this company? In particular, it would be great if someone could shed some light on ESpeed's business model, i.e. how exactly do they plan to make money?
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eSpeed, Inc. Introduces Experienced, Dynamic Board of Directors; Former SEC Chairman and Cisco CFO Among Those to Guide Leading B2B Exchange Company
NEW YORK, Jan. 18 /PRNewswire/ -- Following its IPO in December, eSpeed (Nasdaq: ESPD - news), a global leader in the creation of business-to-business marketplaces and one of the premier operators of real-time electronic exchanges, today announced the introduction of four new officers to its Board of Directors. Joining Howard Lutnick, Chairman, Frederick T. Varacchi, President and Douglas Gardner, Vice Chairman on the Board are former SEC Chairman Richard C. Breedan, Cisco Systems CFO Larry R. Carter, Chase Manhattan Corp. Executive Vice President William J. Moran, and Cantor Fitzgerald Executive Managing Director Joseph P. Shea. The combination creates one of the most experienced and visionary Boards in the industry.
``Our Board members bring together a unique combination of Internet dynamism, Wall Street expertise and regulatory acumen,' said eSpeed Chairman and CEO Howard Lutnick. ``Our vision at eSpeed is to create real-time electronic marketplaces for virtually any business-to-business or financial product. This group has the depth of knowledge, experience and imagination to make that happen.'
eSpeed's Board comprises a distinctive blend of financial know-how and business talent. Richard C. Breeden was Chairman of the U.S. Securities and Exchange Commission from 1989 to 1993 and is now President and Chief Executive Officer at Equivest Finance, Inc. From 1993 to 1996, Mr. Breeden served as Chairman for Coopers & Lybrand, and continues to serve as director for The Philadelphia Stock Exchange.
``Richard brings an incredible amount of experience from his many years of service in both public and private institutions,' said Frederick Varacchi, President and Chief Operating Officer of eSpeed. ``His work at the SEC and expertise in exchanges made him a natural choice for a marketplace company like eSpeed.'
Adding his knowledge of the Internet and technical industries to eSpeed is Larry R. Carter, Chief Financial Officer at Cisco Systems. Prior to joining Cisco Systems, Mr. Carter held many high-level positions including Vice President and Corporate Controller at Advanced Micro Devices, Vice President, Finance and Chief Financial Officer at V.L.S.I. Technology, Inc. He also worked for 19 years at Motorola, Inc.
``Cisco is all about creating technology, eSpeed is all about using technology,' said Fred Varacchi. ``Larry helps us bridge the gap between financial services and the B2B markets that are eSpeed's future.'
William J. Moran serves as Executive Vice President and General Auditor at Chase Manhattan Group. Prior to joining the company, Mr. Moran worked at accounting firm Peat, Marwick, Mitchell & Co. for nine years. The Audit Commission of the Bank Administration Institute, The Citizens Crime Commission of New York City and the School of Management Advisory Council of Marist College have also been privileged to receive his counsel.
``Bill's reputation on Wall Street is unsurpassed,' said Howard Lutnick. ``His deep insight into the financial industry is an enormous asset to us.'
Joseph P. Shea is an 11-year veteran of marketplace company Cantor Fitzgerald, L.P. Starting as Managing Director of the corporate bond department, he assumed the Managing Director position for U.S. government agency securities as well in 1995. Later promoted to Senior Managing Director of U.S. taxable fixed income securities in 1997, Mr. Shea took the post of Executive Managing Director in 1999.
About eSpeed, Inc.
eSpeed, Inc. operates multiple buyer/multiple seller real-time electronic marketplaces and exchanges and it expects to become a leading creator of non-financial business-to-business marketplaces. eSpeed's large array of business-to-business markets provides instantaneous transaction execution of financial instruments, and scalability and extendibility to virtually every B2B secondary market. Over 500
institutions across the globe, including the 25 largest bond trading firms in the world, rely on eSpeed's systems to transact over $150 billion daily. eSpeed is headquartered in New York. Additional information on eSpeed is available via the Internet at espeed.com. |
