Here is the Bloomberg article. Most of the reasoning seems to fly in the face of what other analysts are saying.
Knight/Trimark Falls After Bear Stearns
`Unattractive' Rating
Jersey City, New Jersey, Jan. 26 (Bloomberg) --
Knight/Trimark Group Inc. stock fell as much as 8
percent after
Bear Stearns Cos. rated the stock ``unattractive'
because of
increased competition and slowing market share gains.
The Bear Stearns analyst, Amy Butte, was Merrill
Lynch &
Co.'s analyst on Knight/Trimark in mid-1998 when
Merrill managed
the company's initial stock sale. In her report
today, entitled
``A Dimming Light,' Butte said Knight/Trimark, the
biggest Nasdaq
market maker, can't record the kind of market share
gains as in
the past four years because of heightened
competition.
She placed a 12-month ``price objective' of less
than $20 on
the stock.
Knight/Trimark fell 2 1/4 to 31 7/16 in early
trading.
Earlier it fell as low as 30 15/16.
``We believe that the company's earnings growth could
slow
materially over the next several years due to
increased
competition from ECNs, Instinet's entrance into the
retail market
and growth from traditional full-service
competitors,' Butte
wrote. Merrill, for example, has boosted by 20
percent the number
of stocks its market maker business handles, she
said.
Electronic communications networks, or ECNs, like
Reuters
Group Plc's Instinet now execute one-third of Nasdaq
transactions,
automatically and anonymously. Instinet has said it
will start an
online brokerage in April; Knight/Trimark gets about
half its
business from online brokerages. |
