Doc - What else does Ashton have besides VTS? Let's see:
eMC, Inc. (Electronic Market Center) - An on-line trading system for small to mid-sized brokers, banks and other financial intermediaries who lack on-line trading in their current incarnations. Some view this as the "gem" in Ashton's business plan.
Gomez Advisors - ATG owns a hair under 5,000,000 shares of a company widely recognized as one of the top authorities with regard to on-line commerce, particularly in the financial services field. The prevalent belief is that Gomez will go public before the end of 1999.
UTTC - that'd be (i) eOX (electronic options exchange, to step in the breach when the DoJ shuts down options trading as it is currently conducted), (ii) eAS (a true electronic auction system, not merely another ECN trying to get into the game that the NYSE and NASDAQ currently play), (iii) ePLOB (electronic public limit order book, integrated within UTS), (iv) Croix Securities (offering soft dollar services to customers of UTS and others), (v) NextExchange (to become licensed as a for-profit exchange, in order to help ATG avail itself of opportunities presented by Reg ATS), and (vi) VTS, which according to ATG will be operational and performing live executions before the end of this month -- By the way, do you really think the SEC would approve a PHLX price list for charging users of the VTS system, which it approved only a few days ago, if PHLX and ATG were not going forward with a launch? Indeed, do you think PHLX would have sought such an approval, if the launch were not imminent? have you visited the PHLX web site recently to see how they are publicizing the intro of VTS?? Did you know that 8% of all trade executions in the USA today are made as part of a VWAP order performed synthetically, and thus inaccurately? By my count, that's in excess of 150,000,000 shares a day traded using an imperfect form of VWAP. So when you say "if this thing doesn't work out for Ashton", I take that observation with a huge grain of salt and think to myself "that's a risk I'm willing to take."
ATG-Canada - Joint venture with TK announced over a month ago. Steps are in process to introduce VTS (and presumably other aspects of UTS mentioned above) on one or more provincial exchanges. I think developments regarding this subsidiary will be forthcoming very soon.
ATG-International - Pursuing an opportunity to introduce on-line electronic trading systems (including VTS) into China, which is in the process of creating a market economy.
Doc, I think you do not understand what ATG is really about. You seem to think it is a single VWAP trading system, being implemented by a small, second rate outfit of neophytes and intellectuals, doomed never to be launched, or if launched, doomed to be a bit player in the playing field of securities trading. You (and Auric, your buddy) clearly disrespect Fred Rittereiser, Fred Weingard and William Uchimoto, or more likely, have decided not to figure out who they really are and what they are really about, because it is easier to post 144's and spread negative anecdotes and fear than it is to deal with the facts. Having personally taken the time to get to know Mr. Rittereiser, at least a little, my sense is that he knows more about this industry than all but a handful of people (who are at, but not above, his level), that he knows exactly how the current stock-trading marketplace works, and how it can be scammed, that he has set about creating systems that will appeal to the institutional investors who are tired of being scammed, and that the market for these systems is huge and largely untapped at this point. I think that the "powers that be" would love it if there were no Ashton, and no other companies like it, to take shots at their little monopoly, but they are so stuck in their ways, and resistant to change, that Ashton (and other companies like it) are bound to strike a chord and make a real impact, which will translate into profits and value creation.
As to how we will know if the system is running, and what volumes it is generating, the volume of VWAP trades is legally required to be reported on the consolidated tape twice each day, first at 9:21 a.m., to reflect matches, and then at about 4:15, to reflect executions. The first print will be gross numbers, per stock, the second number will be broken down by the size of each execution. That is the law -- it is in the SEC approval. Dow Jones and others in the financial reporting field will presumably make that information available to the public, but unquestionably the public will be able to figure out what those figures are on a daily basis. Like all other companies, we will get a visceral sense of revenue from the volume numbers, but will await quarterly reports for profitability analysis.
AJ - as to your question regarding whether VTS launch will result in a sell off (buy on the rumor, sell on the news), well, I suppose there are those who will sell in such circumstances -- but it is very clear that the current stock price does NOT reflect a successful VTS launch. The issues involved in a successful launch of a tech system like this are monumental, and a lot can go wrong. I am leaving out the credit issues associated with clearing large block transactions, the liquidity issues involved in attracting sufficient critical trading mass to make the system profitable in the long term, and simply talking about the tech issues. Given the long history of delay in getting VTS on-line and operational, I personally expect there to be significant price appreciation (similar to the price appreciation which occurred after the SEC approval was issued on March 24) when successful launch has occurred. And if you combine that with the possibility of positive developments on ATG's other business units (see above) between now and then, it seems counterintuitive to worry too much about it. Just my opinion of course.
MST |
