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

To: Bob Kim who wrote (5085)	10/14/1999 6:14:00 PM
From: Herschel Rubin	Read Replies (1) \| Respond to of 10027

From the Q3 balance sheet, NITE was net LONG in its trading positions at the end of Q3, compared to net SHORT going into Q3. Being net short during the first few weeks of Q3 was NOT beneficial to the bottom line. From the Q3 Press Release (abbreviated balance sheet) KNIGHT/TRIMARK GROUP, INC. Consolidated Statements of Financial Condition (Unaudited) ASSETS Cash and cash equivalents... etc. Securities owned, at market value 100,822,606 LIABILITIES & STOCKHOLDERS' EQUITY Liabilities Securities sold, not yet purchased, at market value $86,789,389 ... So NITE was net long by over $14 million going into Q4, which, as it turned out, was the correct thing to do - refer to a Nasdaq chart. And from the 10-Q for the qtr ending June 30th: "In the normal course of our market-making business, we maintain inventories of exchange-listed and OTC securities. The fair value of these securities at June 30, 1999 was $201.8 million in long positions and $219.3 million in short positions. Therefore they were net short over $17 Million going into Q3. Although we tend to remember July & August as bad months for the market, there was actually a strong linear rise (about 10%) in the first week or two of July related to earnings. Since NITE doesn't hold positions very long, one would have to assume that this net short $17 million position was NOT to their advantage as they probably weren't able to hold onto these short positions long enough. This may also explain the poor revenues per trade stats. In the current quarter, being net LONG a/o Sept. 30 was ideal for NASDAQ, DOW, S&P (refer to charts to see the runup in first week of OCT, so it would appear NITE was in the correct position going into the current quarter. Gary, the Easdaq stake does not appear in the Income Statement, but there is a new line in the Balance Sheet called "Investments" that wasn't there before in the Q2 Balance Sheet: Investments 11,672,934 Their investment in Easdaq was $8.2M, so there's something else in there as well. The Easdaq Stake announcement was during the quarter on July 29th: corporate-ir.net