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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: steve goldman who wrote (6432)	2/5/1999 10:00:00 PM
From: TFF	Read Replies (1) \| Respond to of 12617

Internet Financial Services(A. B. Watley)files for IPO By Bloomberg News Special to CNET News.com February 5, 1999, 4:30 p.m. PT Internet Financial Services, operator of online trading systems that cater to "active traders" who frequently buy and sell stocks, filed to sell a 23 percent stake to new investors through an initial stock offering. The New York-based company, formed in 1996 to acquire the brokerage firm A.B. Watley, filed with the U.S. Securities and Exchange Commission to sell 1.7 million shares for $6 apiece. At that price, IFS would have a market value of $44 million, based on 7.3 million shares to be outstanding after the offering. The money-losing company has transformed itself into an online broker through two services, UltimateTrader and WatleyTrader, that offer stock quotes, news, and order execution services on a real-time basis over the Internet. IFS, whose founders include brothers Steven Malin and Robert Malin, also executes block trades for institutional investors. Online trading is the fastest-growing part of the securities industry as more people buy and sell stock online. From a total 1.5 million online accounts at the end of 1996, the market is expected to grow tenfold to 14.4 million online accounts in 2002, according to data cited in the IFS filing. The company hopes to take advantage of the online trading boom by offering what it describes as a premium service aimed at the high-end of the market. "We look at where we can mine the top 2 to 5 percent of the online trading industry because no one really offers this kind of premium service," said Anthony Huston, executive vice president at IFS. IFS competitors include E*Trade, Charles Schwab, Quick & Reilly, Waterhouse Securities, Fidelity Brokerage Services, and Datek Online Brokerage Services. "It's an uphill battle for any new entrant into this market because of the type of investment needed to be successful,'' said Michael Chung, an analyst at New York-based Williams Capital Group. IFS will use $2.5 million in proceeds from the stock sale to build its brand name through marketing, and another $2.3 million to expand and upgrade its network. IFS said it also may devote money to setting up its own clearing operations, expanding its institutional sales desk, to repaying debt and for other general corporate purposes. IFS has narrowed its losses and increased its revenue over the past year. The company reported net losses of $632,410 in the year ended September 30, 1998, compared with net losses of $1.1 million in the year ended September 30, 1997. The company had revenue of $9.1 million in the year ended September 30, 1998, compared with revenue of $4.5 million in the year ended September 30, 1997. IFS makes most of its money -- about 67 percent of 1998 revenue --from UltimateTrader. The system provides access to bid and ask prices, charts, research and other stock information. Traders can use the system to route orders directly to market makers, electronic communications networks, the Nasdaq Stock Market and exchanges such as the New York Stock Exchange. Fees start at $16.95 for each transaction. Real-time data costs extra and can be free depending on how many trades a customer executes each month. The WatleyTrader system costs $9.95 per transaction and provides order execution through a trading desk. Chief Executive Steven Malin, 41, will hold a 22.5 percent stake in IFS after the stock sale. Harry Simpson, chief operating officer, will hold a 7.6 percent stake and Huston will hold a 6.8 percent stake after the IPO. Whale Securities will underwrite the stock sale. The company expects to trade on the Nasdaq SmallCap Market under the symbol IFSX.

To: steve goldman who wrote (6432)	2/5/1999 10:04:00 PM
From: TFF	Respond to of 12617

Congressmen ask SEC about Net trading By Reuters Special to CNET News.com February 5, 1999, 11:20 a.m. PT WASHINGTON--Four Democratic members of Congress told the head of the Securities and Exchange Commission yesterday that they are concerned about online stock trading, including whether computer systems can reliably keep up with demand. In a letter to SEC Chairman Arthur Levitt dated February 4, the lawmakers asked Levitt to answer nearly a dozen questions about the highly popular form of trading, and said Congress may hold more hearings on the issue. "We are concerned about the capacity and other operational problems afflicting online trading systems and the adequacy of investor education and risk disclosures with respect to online trading," the House members wrote. Signed by Reps. John Dingell of Michigan, Ron Klink of Pennsylvania, Ed Markey of Massachusetts and Edolphus Towns of New York, the letter said the Senate permanent subcommittee on investigations may hold a hearing on online trading as early as next month. Dingell is the ranking member of the House Commerce Committee, while the others are ranking members of various subcommittees that deal with telecommunications and trade, finance, and oversight matters. Among their questions: the number of online trading systems in the United States; daily trading volumes; and how many online trading complaints the SEC received last year. The lawmakers also want to know if federal law gave the regulatory agency the proper tools it needed to protect investors as well as the regulatory issues concerning online stock underwriting. Late last month, Levitt released a statement expressing his own reservations about buying and selling securities on the Internet. Levitt, Wall Street's chief regulator, said Internet brokerage accounts made up about 25 percent of all retail stock trades, and those accounts are expected to surpass 10 million by the end of the year. He said the number of complaints his agency received concerning Internet trading has increased 330 percent in the last year. The House members commended Levitt's Jan. 27 statement, but said "much more needs to be done."