Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Gary Korn who wrote (4751)	10/8/1999 5:19:00 PM
From: Dalin	Read Replies (1) \| Respond to of 10027

Thanks Gary. I liked that article too. Now here is some info from the Bull Market Report that is not so good. Full Text of the BMR NewsFlash The Bull Market Report - bull-market.com NEWS FLASH - THE BULL MARKET REPORT - Knight-Trimark (NITE) The markets are up nicely today and Knight-Trimark (NITE) is down. After hitting a high of $81 earlier this year, it has come straight down to its current level of $30 a share, but still up from its low of $2.25 set 12 months ago. Knight-Trimark is in the business of making markets in Nasdaq and NYSE stocks by putting up their own capital to buy and sell shares and creating the liquidity necessary for the major brokerage houses to trade stocks. The firm has been wildly successful. We added the stock at $20 in February and generally have been pleased. Knight Trimark is a great business. Starting just 5 years ago, it now controls 20% of all Nasdaq trades, and 7% of NYSE trades. Historical revenue growth has been 100% per year, with greater than 30% margins. Knight was started by E*Trade, Discover, Ameritrade, and Waterhouse Securities as a joint venture and these firms route trades to Knight Trimark for execution. Trades take about 20 seconds to fill, whereas an ECN can do it in less than a second. Sanford Bernstein in a recent research report, estimates that the ECNs, primarily Archipelago, Island, and Redi, will eventually capture 50% of all Nasdaq trades and 25% of NYSE listed stocks. But now we're worried. Their business is being attacked by the ECN's - the Electronic Communication Networks, which are organizations designed to put buyers together with sellers. Their costs are about 1/30th of NITE's. We don't have time here to go into great depth about this new business - we have done this before in The Bull Market Report, but suffice it to say that unless NITE makes some changes, they are in jeopardy of losing their entire franchise. There is no question that Knight-Trimark will continue to increase market share, but their margins will be pushed lower by this new competition. Even if they double in size, it is going to be hard to increase profits in the future. We have said many times that the president of the firm, Pasternak, is a genius and that he will be able to pull his firm through and to lead the new world of stock market trading. We still believe this to be the case. However, we would rather have our money in Cisco (CSCO) and Global Crossing (GBLX), among others, instead of waiting to see if Knight-Trimark is going to make it or not. So, we hereby sell our position in Knight-Trimark, now trading at $30 a share, locking in a profit of 50% in 8 months. What should YOU do? That choice is up to you. You can hang with it and hope for things to change - we're on Internet time, you know, or you can sell it and move on. Please get some other professional advice before you make a move, as there may be many other ways to look at this fine firm. Todd Shaver Editor in Chief The Bull Market Report Washington, DC _______________________________________ End of their Newsflash and beginning of my own personal comments I have subscribed to the BMR for awhile now and have owned NITE before they were recommending it. Todd Shaver's publication has changed over the months, much the same as a mutual fund manager who has too many stocks in their portfiolio to be effective, I believe this is also happening to the BMR. Their philosphy has been to recommend buy and hold for the long term, solid growth companies and to look for potential gorillas in the making. I have seen this philosophy evolve and change into something else latley, and believe many others are noticing the same thing. Recent examples were how they flip-flopped on their newsflash about E-Trade a couple of months ago. They had been touting E-Trade the same way as NITE and sent out a sudden newsflash to sell, were undunated with e-mails from angry sucsribers and flip-floped on the decision. You just have to wonder about Todd....perhaps he has bitten off more than he can chew at the moment. In this business you do not tout one week and sell the next, unless of course your philosophy is daytrading or short term trading. In any case I read their report for news about stocks and make up my own mind. As to their clout in moving stocks, I believe that their following has diminished after a few such blunders and do not expect this news to have any real impact to NITE.