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 : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Miller who wrote (4188)	1/11/1999 6:51:00 AM
From: nord	Read Replies (2) \| Respond to of 13953

Is there more here than meets the eye? Is this just a sale of equity stake to egrp and GS or is this the beginning of a relationship between the two. As I suggested before the opportunities for EGRP will be bigger than on line brokerage. Investment Banker. Why wait? By teaming with someone like GS it would be a win win for both companies. Nowe that they share a common investment and seemingly the beginnings of a parallel strategy could this be the strategy that GS is taking to enter into the world of E commerce using the technological saavy of the EGRP to get a jump on other investment bankers. Speculation on my part but it makes alot of sense and the clues certainly are there. They didn't each buy a 25% stake in a vacuum. ETRADE and Goldman Sachs Each to Buy 25 Percent Stake in Established Electronic Communication Network (ECN), Archipelago PR Newswire - January 07, 1999 08:40 Investment Establishes ETRADE's Place in Latest Trend in Technology-Enabled Trading; ECNs Now Account for 22 Percent of All Trades of Nasdaq Stocks; Yet Another Electronic Channel For Rapid, High Quality Order Routing and Execution PALO ALTO, Calif., Jan. 7 /PRNewswire/ -- ETRADE Group, Inc. (Nasdaq: EGRP) today announced that the company and international investment banking and securities firm, Goldman Sachs Group, L.P. ("Goldman Sachs"), have each agreed to acquire approximately 25 percent voting interest in Archipelago (Symbol: TNTO), the operator of an existing Electronic Communication Network (ECN) for Nasdaq stocks. Strengthening ETRADE's leadership as an all-electronic provider of financial and investment services for online investors, the acquisition will further position it as a player in the market for technology-enabled ECNs. Under the agreement, ETRADE and Goldman Sachs, as well as the founding partners, Virago Enterprises, LLC and Townsend Analytics, Ltd., will each own approximately one-fourth of the voting interest in a new company, Archipelago Holdings, LLC. Created in 1997, Archipelago is one of 9 ECNs granted permission by the Securities and Exchange Commission (SEC) to allow purchase and sale transactions to be matched electronically outside the exchange trading system. Archipelago currently serves approximately 4,000 individual and institutional traders. "Archipelago represents a strategic investment in leading-edge technology that will extend our leadership in the evolving electronic financial services market," noted Christos M. Cotsakos, Chief Executive Officer and Chairman-elect of ETRADE. "Archipelago's trading system will provide ETRADE with yet another opportunity to serve our customers who derive value from the speed, efficiency and anonymity associated with ECN-based trading, further leveraging our Stateless Architecture (SM) launched with our Destination ETRADE Web site. Ultimately, Archipelago is another way to improve the quality of service by giving our broad base of customers more choices through which their securities orders can be executed." "ECNs are playing a growing role in providing individual and institutional traders alike with fast, cost-effective access to financial markets, both during regular and after-hours trading," Cotsakos continued. "With ETRADE and Goldman Sachs as partners in this enterprise, Archipelago has the opportunity to establish itself as the premier ECN serving both the retail and institutional markets." Since the SEC passed regulatory changes to allow ECNs in 1996, ECNs have played a growing role in the equities trading market. ECNs currently account for some 22 percent of the share volume for Nasdaq stocks and almost 5 percent of orders in securities listed on the NYSE, according to the Securities and Exchange Commission (Release No. 34-40760). ECNs allow orders to be directly routed and displayed on the floor of an exchange or the Nasdaq Stock Market without the need for an intermediary, thus assuring order anonymity. "ECNs are clearly a significant and growing segment of today's financial services market," said Duncan L. Niederauer, a managing director at Goldman Sachs. "Our investment in Archipelago demonstrates Goldman Sachs' continued commitment to provide our clients with the broadest array of liquidity services." "By adding ETRADE and Goldman Sachs as partners in Archipelago, we have created a new, more powerful force in the electronic financial services market," said Jerry Putnam, President of Virago Enterprises, LLC and one of the founders of Archipelago. "E*TRADE is a leading Internet financial services company and shares our vision of investor empowerment through technology." Archipelago has an exclusive agreement with Townsend Analytics, Ltd., for use of Townsend's proprietary Book Server software, which enables ECN order matching and preferencing, for the purpose of trading U.S. equities and a nonexclusive agreement for purposes of trading other financial instruments. In addition, Archipelago has a licensing agreement with Townsend Analytics Regards Norden