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To: Morpher who wrote (7230)	5/11/1999 4:46:00 PM
From: TFF	Respond to of 12617

Instinet buys stake in W.R Hambrecht By Bloomberg News Special to CNET News.com May 11, 1999, 10:30 a.m. PT Reuters said its Instinet electronic brokerage unit bought an 11.4 percent stake in U.S. investment company W.R. Hambrecht for $20 million, furthering its expansion in Internet-based financial technology. San Francisco-based W.R. Hambrecht conducts initial public offerings for companies using an Internet auction. Hambrecht and Instinet are in the "advanced'' stages of talks to form a joint venture for raising capital in Europe and Asia, Reuters said. London-based Reuters is developing a global electronic- trading network, and initial public offerings via the Internet would add to its range of electronic products. Last week, the company said Instinet and a group of securities firms plan to buy a majority stake in Tradepoint Financial Networks, a U.K. electronic stock-trading system. In ordinary share sales, the underwriter calculates a price range for the stock and then tries to sell shares to its large, institutional clients. However, demand by small investors for shares of Internet-related companies has caused prices to soar following many recent offerings, leading some brokerages to explore selling shares directly to investors online so their clients receive the windfall, instead of a few favored investors. Hambrecht was founded a year ago by Bill Hambrecht, the co- founder and former head of Hambrecht & Quist Group. The company's "OpenIPO'' system is designed to find the highest price at which an issuer can sell the desired number of shares. Its first transaction was as underwriter for U.S.-based Ravenswood Winery Inc. earlier this year. Rival Wit Capital has helped distribute shares online in more than 40 stock sales. E*Trade the Palo Alto- based online brokerage, is developing a public offering business with Sanford Robertson, former head of Robertson Stephens & Co., now BancBoston Robertson Stephens. By making it easier for small investors to participate in share sales, Hambrecht could also accelerate Instinet's goal of moving into the retail market. Instinet, which has gained a following among institutional investors by letting them trade directly with each other electronically and anonymously, said last week it's in talks with online brokers and other securities firms to make its electronic securities trading system available to individuals. Chief executive Doug Atkin has said Reuters is considering spinning the unit off as a separate company. Instinet is spending about $100 million a year on technology. Copyright 1999, Bloomberg L.P. All Rights Reserved.