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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (3949)	9/15/1999 1:16:00 AM
From: blankmind	Respond to of 10027

from wsj online: September 15, 1999 GE's CNBC Purchases a Stake In Aspiring Electronic Exchange By GREG IP and SALLY BEATTY Staff Reporters of THE WALL STREET JOURNAL In a move that raised some eyebrows, business cable channel CNBC has bought a piece of Archipelago, an aspiring electronic stock exchange. CNBC, a unit of General Electric Co., said it bought a 12.4% stake in Chicago-based Archipelago Holdings LLC, joining seven other major investors, including five major brokerage firms. CNBC's purchase puts it in a potential conflict of interest. But CNBC officials say they would not risk the integrity of their core franchise by slanting coverage. Merrill Lynch to Purchase Stake in Electronic Trader Archipelago (Sept. 10) Furthermore, CNBC's move is simply one of many corporate alliances in the rapidly changing media and communications industries that have left business journalists increasingly facing potential conflicts. Archipelago is an "electronic communications network," which automatically matches buyers and sellers of stock or routes their orders to other venues in search of the best price. It has applied to the Securities and Exchange Commission to become a stock exchange so that it can compete directly with both the New York Stock Exchange and Nasdaq Stock Market. It also plans to go public. The past two years have seen a rush by numerous companies to take stakes in various electronic trading systems as the markets evolve. But whereas most of these companies are financial firms, CNBC delivers business news that affects the decisions of millions of average investors. -------------------------------------------------------------------------------- Joining the Gang Shareholders in Archipelago Holdings LLC and when they joined: Gerald Putnam 1996 Southwest Securities* 1996 Townsend Analytics 1996 ETrade Group January 1999 Goldman Sachs Group January 1999 J.P. Morgan/Amer. Century June 1999 Instinet July 1999 Merrill Lynch September 1999 CNBC September 1999 1% shareholder

To: blankmind who wrote (3949)	9/15/1999 4:01:00 AM
From: Herschel Rubin	Read Replies (2) \| Respond to of 10027

Other possible causes of today's drop: Oilbabe & Dalin, you both mentioned I posted this too soon today: With NITE only down a half dollar today, one could conclude that NITE shareholders are no longer flinching when ECN news comes out But I'm still NOT convinced that NITE's sharp drop at 3:00 p.m. today had any relation to the fact that CNBC took a stake in an ECN. After all, NITE had virtually all day to react to that news and it seemed to be holding for most of the day. I maintain that most NITE holders are no longer freaked out by ECN's, unless, of course, CSFB comes out with a report that says ECN's are taking a substantial chunk of NITE's market share away from them (which isn't true). Rather, there could be other possible explanations for today's drop: 1. The low $30's region may have been rich in stop-loss orders. At times, when MM's think a stock is going to go up (e.g. Knight-Trimark presents at Merrill today Wednesday and something might be announced), they'll race each other down the limit order book to scoop up stop-loss shares. Since $30+ has been a good support level in recent weeks, it is logical that day traders and investors might have nudged their stop loss orders in at this level. 2. Options expiration: Market makers often try to unwind their options positions before expiration, for example, by buying back calls they've written, so they don't have to carry their hedge into expiration. If they let the share price drop, or short, the value of calls they've written drops substantially so they can buy back at a discount. 3. Is it possible that the street get word of one of NITE's original OLB investors selling a chunk of shares today? And then panic begets panic.... Hard to tell, but selling of NITE by the OLB investors is to be expected. 4. Merrill interested in buying NITE, so it wants to see a low share price. (This is probably a stretch, but is plausible). Today's drop was just too bizarre to not have an explanation. Just by the action, we know something is up. And, Gary, I took a look at comparison charts of SCH & NITE. It is true that both NITE and SCH shared price declines in the last hour, but the volume associated with SCH's decline was not out of the ordinary, whereas NITE's last hour's volume was unusually high. Furthermore, SCH fell from $37 1/4 to $36 1/4 during that time, whereas NITE fell from $33 5/8 to $30 1/2 to close at $31 9/16. Therefore, I would NOT conclude there was strong correlation between NITE's behavoir and SCH's. Rather, it seems to be NITE-specific.