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

To: Glenn D. Rudolph who wrote (4135)	9/18/1999 8:32:00 AM
From: oilbabe	Respond to of 10027

Jersey City, New Jersey, Sept. 17 (Bloomberg) -- Knight Knight/Trimark Group Inc. shares fell for a fourth day on investor concern that the biggest Nasdaq market maker's earnings will be hurt by slower trading volume. Jersey City, New Jersey-based Knight fell 1 3/4, or 6.1 percent, to 27, its lowest closing price since March 24. The stock is down 21 percent since Monday, and two-thirds from its record close of 78 15/32 May 10. ``Concern about volumes is the catalyst here,' said Amar Mehta, analyst with CIBC Oppenheimer Inc., who has a ``strong buy' rating on the stock and a $98 price target. ``Online brokers' reports have fueled that.' On Wednesday, Charles Schwab Corp., the biggest Internet brokerage, said commission-producing trades fell 14 percent during August, making it likely that trades will fall industry- wide this quarter for the first time. Firms such as E*Trade Group Inc. and TD Waterhouse Group Inc., the second- and third-biggest Internet brokers, feed Knight about half of its orders. A market maker attempts to match buy and sell orders to complete trades for its customers -- brokers and institutions -- and make a profit in the process. Knight, formed in 1995, now completes one in six Nasdaq Stock market trades. ``You can't grow linearly,' said Kenneth Pasternak, Knight's president and chief executive. ``We've had two straight quarters of achieving two and three times our goals, and I've tried to tell people that's not sustainable.' Estimates Cut Analysts at BancBoston Robertson Stephens and Jefferies & Co. reduced third-quarter earnings estimates on the company Wednesday. Six of nine analysts who cover the stock have now reduced quarterly estimates in the past 30 days, dropping the consensus to 35 cents a share from 42 cents, according to First Call Corp. Knight is expected to report third-quarter earnings in about a month. The company should earn 32 cents a share compared with 13 cents a year ago, said Mehta. ``That's more than 100 percent year- over-year growth, and if that's not good enough, I don't know what is,' he said. An announcement by eight electronic communications networks yesterday that they'll share price quotes after regular stock market hours didn't hurt Knight stock, said Mehta. ECNs automatically match about 30 percent of Nasdaq Stock Market buy and sell orders before they reach any market maker's desk. ``Every day there are more and more announcements, and that's all they are is announcements,' said Mehta. Knight owns a minority stake, with Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley Dean Witter & Co., in an ECN called the Brass Utility LLC. ``It's not unlikely we would make an equity investment in an exchange utility,' like the Nasdaq or ECNs Archipelago LLC and the Island ECN Inc., as they seek approval to alter their regulatory structure to capture more electronic orders, said Pasternak.

To: Glenn D. Rudolph who wrote (4135)	9/18/1999 12:03:00 PM
From: Gary Korn	Read Replies (2) \| Respond to of 10027

Glenn, Thanks for the synopsis. So, we stepped into the following negatives: - interest rates (financial sector weakness) - seasonality (3Q) - end of lock-up - threatened competition (ECNs) Against those, I see the following positives: + potential growth of u.s. institutional order flow (currently 20% and fastest growing segment of business) + potential growth of euro. institutional order flow (London office, with a sales force now of at least 6 persons) + potential euro. OLB order flow + potential options order flow in 2000 + potential growth of trading volumes over time + potential seasonality (4Q) + potential for coexistence with ECNS I can see how the "potential" positives are unable to overcome the "actual" perceived negatives for the time being. But things change. Gary Korn