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

To: Gary Korn who wrote (5323)	10/28/1999 2:20:00 AM
From: Herschel Rubin	Read Replies (1) \| Respond to of 10027

ETrade, Susquehanna Partners Plan to Invest in Easdaq Market October 28, 1999 Business and Finance - Europe By SILVIA ASCARELLI Staff Reporter of THE WALL STREET JOURNAL LONDON -- Online brokerage firm ETrade Group Inc. and Susquehanna Partners GP -- one of the world's largest proprietary trading firms -- are investing in Easdaq, giving the troubled pan-European market for growth stocks access to more U.S. investors. Three other Easdaq shareholders are increasing their stakes as well, as part of a second round of financing to raise 3.2 million euros in preparation for a rebirth of the three-year-old exchange. Easdaq raised 22.8 million euros this summer from a number of major securities firms, including Goldman Sachs Group Inc. and Morgan Stanley Dean Witter & Co. At that time, it said it would focus on the trading of European growth and technology stocks, instead of helping companies go public. Potential Business More important than the latest infusion of cash, however, is the potential business ETrade and Susquehanna Partners can bring. ETrade, which has more than 1.5 million active accounts, is the No. 2 online brokerage firm in the U.S. in terms of number of trades. It averaged 80,350 transactions a day during the third quarter, nearly 40 times the total number of daily trades on Easdaq. The company plans to launch Internet sites in 20 top financial markets world-wide, and already has Web sites in the U.K., France and Sweden. By buying a 2.26% stake, ETrade is the first Internet brokerage firm to invest in Easdaq, a market that won't be completely electronic until next year. ETrade officials were unavailable for comment on the investment. "Our primary goal is to tap the retail client base that we believe will explode in this group of online brokers," said Clive Pedder, head of market development at Easdaq. Susquehanna Partners, based outside Philadelphia, will own 1.13% of Easdaq. Company officials also were unavailable for comment. The firm's expertise centers on derivative products, which Easdaq doesn't offer. The firm, which participates in about 2% of the New York Stock Exchange's volume annually, has an office in Amsterdam and is opening one in Ireland. Several Competitors Easdaq is one of several ventures with pan-European ambitions, but it is far from clear whether it can succeed. Eight of Europe's largest national exchanges plan to link their blue-chip markets, while the Nasdaq Stock Market is seeking support to launch a European exchange of its own, and Tradepoint Financial Networks PLC, which failed in its attempt to take on the London Stock Exchange, plans to begin trading European blue-chip stocks next year. Easdaq has failed to establish itself as the European version of Nasdaq; only 51 companies trade on it, one-sixth the number on the Euro.NM alliance of five national growth markets. As part of its new strategy, Easdaq expects to begin trading shares listed on other stock markets by late this year. Which stocks, and how many, will depend on the interest of market makers. More details are expected to be announced within a month. In addition to the stakes taken by E*Trade and Susquehanna, Knight/Trimark Group Inc., the biggest market maker on Nasdaq, is boosting its stake in Easdaq to 19.49% from 18.92%. It remains the largest investor in Easdaq, followed by Equitable Life Assurance Co. of the U.K., which is raising its stake to 7.56% from 7.23%. Herzog Heine Geduld of the U.S., one of Easdaq's most active market makers, will own 1.19%, up from 0.07%.