Virtu Financial looks to raise €285m
Virtu will offer about 16.5m shares at $17 to $19 apiece, according to a regulatory filing yesterday. At the high end of the offering range, Virtu would be valued at about $2.6bn.
All of the shares are being sold by the company, rather than by existing investors.
The filing precedes formal marketing of the deal, a process that was delayed after Flash Boys, the Michael Lewis book released in March 2014, alleged that high-speed traders, Wall Street brokerages and exchanges have rigged the $24trn US stock market.
Amid the heightened scrutiny caused by the book and various regulatory investigations, officials involved in the offering decided to shelve the deal.
Virtu’s revenue last year was $723m according to the filing, an 8.8% increase from 2013. Net income rose to $190m from $182m the previous year.
The 148-employee company, which uses computerized strategies to buy and sell everything from stocks to currencies, has had only one losing days in its six years of operation.
“Over a million times day, we’re not making money,” chief executive Doug Cifu said at an industry conference in June.
“But when you add up the volume of instruments that we trade, the tens of thousands of strategies that we trade in all the different marketplaces, it’s simply the law of large numbers, and, as a result, yes, we are profitable every day.”
Virtu has thrived as two decades of market reform and computer advances helped automated traders largely supplant humans on the floors of exchanges around the world.
The company’s main business is market making, using software to provide standing offers to buy and sell stocks and other securities. The last year has seen the departure of Virtu’s president Chris Concannon, who left for Bats Global Markets in November and became chief executive of the exchange operator on March 31.
Virtu started in 2008 by trading US stocks and has since expanded worldwide and into assets including government bonds, currencies and futures. The firm makes markets in more than 11,000 securities and other financial products, trading on more than 225 exchanges in 34 countries.
Bloomberg
