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Non-Tech : Instinet Group, Inc. (INET) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn Petersen who wrote (33)	12/21/2002 9:02:37 PM
From: Glenn Petersen	Respond to of 46

Goldman Sachs denial: biz.yahoo.com Reuters UPDATE - Instinet gains lost after Goldman denies deal report Friday December 20, 12:34 pm ET NEW YORK, Dec 20 (Reuters) - Instinet shares (NasdaqNM:INET - News) gave back large gains from early on Friday after Goldman Sachs Group Inc. (NYSE:GS - News) flatly denied a magazine report that it is in talks to buy the leading platform for trading stocks electronically. "There is nothing to that story," said Kathleen Baum, a Goldman spokeswoman. Silvia Davi, a spokeswoman for Instinet, declined to comment on what she termed "market rumors." Both firms are based in New York. Instinet is majority-owned by global news and information company Reuters Group Plc (London:RTR.L - News; NasdaqNM:RTRSY - News). After soaring 15 percent in early Nasdaq trade on Friday, Instinet shares were flat at $3.89 following Goldman's denial. The shares were among the most actively traded shares on Nasdaq. Goldman shares added 2.7 percent, or $1.89, to $72.19. A report in the latest issue of BusinessWeek magazine says the two were in talks over a proposed deal. The rationale, according to the story, is that Goldman, which already owns a stake in the ECN Archipelago, wants to expand its share of the market for electronic trading while Reuters could focus on its information business. "With the uncertainty around the profitability of Instinet, I don't see anyone going out there to purchase it right now," Bear Stearns analyst Daniel Goldberg said. Bear Stearns advised Instinet on its initial public offering last year, but Goldberg owns no shares in the company. Goldberg, who expects Instinet to lose money next year and rates the company as "underperform," does not expect ECNs and alternate trading markets to grab much more of Nasdaq's trading volume beyond the approximate 50 percent share they have now. Earlier this year, Instinet closed a deal to buy rival Island ECN for about $389 million to create a larger business that might challenge the Nasdaq stock market's trading system. Instinet, which is transforming the company by streamlining costs and changing top management, in October reported its third consecutive quarterly loss as it continues to contend with dismal market conditions. The company recently announced plans to cut 17 percent of its workforce as part of a plan to reduce expenses by $100 million in 2003. Chairman Andre Villeneuve will retire at year's end and will be succeeded by board member Ian Strachan as a non-executive chairman.