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

To: carol alba who wrote (162)	2/4/1999 12:15:00 AM
From: SteveHC	Read Replies (1) \| Respond to of 10027

A run tomorrow? Here's the latest "news" - I'm surprised NITE hasn't fallen farther on it (yet): Knight/Trimark holders to take some chips off table By Jack Reerink NEW YORK, Feb 2 (Reuters) - Shareholders of Knight/Trimark Group Inc., the largest market maker on the Nasdaq electronic stock market, plan on taking some of their chips off the table with the value of their four-year investment in the New Jersey firm having soared 50-fold to around $2.5 billion. The company, which deals in 6,700 stocks, late Monday filed with regulators to sell 9 million shares, 2.4 million by the company and the remainder by executives and outside shareholders. The $400 million share offering will mark pay day for Knight/Trimark's top executives and the 25-odd brokerages that invested in the Jersey City, N.J., company over the last five years. The shareholders, who were barred from selling Knight/Trimark stock for six months after the firm's initial public offering last July, couldn't have picked a more opportune time to announce a sale. The firm, which employs 446 people, posted record 1998 results, thanks to a surge in Internet trading, and has seen its stock price zoom up tenfold from its October low to close at $45.44 on Tuesday "A lot of these investments have been four or five years, and now some of the investors are looking for some liquidity," said the firm's chief executive, Kenneth Pasternak, in a telephone interview. Pasternak, who stands to pocket some $20 million before taxes when he sells 10 percent of his 4.4 million share holding, said he may splurge on a beach house. But the executive, who drives a 1997 Oldsmobile, said he is not a frivolous spender. "Other brokerage executives are either chauffeured or are driving some kind of German car, possibly an English car, but definitely not an Oldsmobile," he said. Pasternak, 44, did receive a $5.1 million bonus last year, on top of his $250,000 base salary. Knight/Trimark is carrying out -- or executing in industry parlance -- record numbers of trades, largely because fast-growing Internet brokerages send their customer orders to the Jersey City, N.J., firm. As a market maker, the firm maintains bid and offer prices on the stocks it deals in, eking out a tiny profit on each trade. "Nearly half of the trades that originate from an online destination end up here," Pasternak said. The surge in cyberspace trading, which in January kept rising at the fourth quarter's 40 percent rate, helped the firm increase profits by 78 percent to $50.8 million last year Moreover, investors keen to buy into companies connected to the Internet have pushed up the firm's market value to $2.5 billion, up 50-fold from the $50 million Knight/Trimark was worth as a private company. A similar increase in the market value of Internet brokerage AmeriTrade Holding Corp. <AMTD.O> recently turned its chief executive, Joe Ricketts, into a billionaire. Pasternak rejected suggestions that the company's four top executives, who all are selling 10 percent of their holdings, are bailing out at peak. "Management still has a significant stake (about 30 percent). Most of what we have is still in the company," Pasternak said. "It's the first opportunity management has had in five years to recognize any value from their equity investments." Most other shareholders -- including online brokerages E*Trade Group Inc. <EGRP.O>, Morgan Stanley Dean Witter & Co's <MWD.N> Discover Brokerage Direct and Toronto-Dominion Bank's <TD.TO> Waterhouse Securities -- also took the opportunity to pair their stakes. Two other major stake holders, AmeriTrade and Southwest Securities Group Inc. <SWS.N>, did not sell any shares. The share offering will increase the company's outstanding stock 4.5 percent to around 55.5 million shares. Management will hold around 29 percent of the stock; brokerage investors 34 percent; and the public 37 percent. The outstanding stock figures exclude some 5 million shares Knight/Trimark has set aside to cover employee option grants. 21:09 02-02-99