Patience is a Virtu(e)
Timing seems right as HFT firm takes another stab at IPO.
Though it's a phrase seldom used today, 'public virtue' was one of the great guiding precepts of late eighteenth-century Republicanism — often used by the founding fathers of the United States to argue against corruption of the monarchy and the undue influence of commerce on government, more generally. Those were slightly higher times in political debate, after all.
A similarly colorful, if not always sophisticated, discourse has sprung up over the last year on high-frequency trading (HFT). And now, it's set to roll with a public Virtu of its own — though of a very different kind.
This week, the multi-asset class HFT firm decided it had waited long enough after Flash Boys' furor to take another stab at listing on Nasdaq. Submitting an S-1 prospectus to the SEC on April 6, the firm is reportedly eyeing valuation somewhere in the neighborhood of $2.5 billion. That would make founder Vincent Viola something that, for all the hoopla, is still fairly rare in HFT: a billionaire.
Sensible Moment
Given what we already know about a Virtu IPO from the first time around, there aren't a lot of surprises in this latest iteration, beyond some revised financials. Now it's just about getting the thing done without another major hitch. As we all know by now, that's no sure thing.
We'd all probably be better off with more high-speed trading houses disclosing more about their business, even at the margins. Read into Flash Boys what you will — for me, that was the real takeaway.
As was pointed out last April when the first effort was aborted, stocks for public exchange operators and similar electronic market makers like KCG were suffering in early 2014 — and they have recovered to a decent extent since then. The ill-fated BATS Global Markets IPO, when the exchange's own systems failed on the same day it was meant to go public in 2012, was also a little fresher on minds back then, as well, than it is today.
All told, therefore, this moment seems like a sensible one from a commercial standpoint. Vinnie will finally cash in. But there's an argument or two for the industry, as well. Though companies going public doesn't always guarantee transparency into what they're up to — far from it — it usually provides more insight and disclosure than we had otherwise.
And that will surely be the case with the conspicuously tight-lipped Virtu.
For one thing, we'll definitely know better whether certain disputed claims about trading at speed are true — Virtu was harangued during the first IPO for arguing that it made money every single day for years, for example — and better industry analysis of HFT will hopefully follow.
For another, with HFT giants in KCG and Virtu now both trading publicly, we should get a better sense of how the market really feels about regulatory risk and the practice's prospects going forward — a fresh opinion without caveats in a debate that could probably use one. It's not exactly an 'HFT index', but it's a start.
Bookends
Most of all, though, Virtu's renewed IPO push is further proof that the era of Flash Boys may have finally crept to an end — and done so with relatively little substantial change, at least as of yet, beyond a few ongoing investigations.
Of course, as the IPO process moves along it should prove interesting to see how well Virtu actually does. One hopes it does well, because for the reasons above, we'd all probably be better off with more high-speed trading houses disclosing more about their business, even at the margins. Read into Flash Boys what you will — for me, that was the real takeaway.
For now, an HFT public offering, once derailed, again heads forward — and whichever side of the debate you're on, that seems just a little fitting.
Next, Viola just needs to get his hockey team, the Florida Panthers, back in the NHL playoffs. Sadly, that could take a while longer. Somehow or another, HFT belongs in the markets in 2015. Hockey in South Florida? Well, that's a different question.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Getting aggressive: Overbond uses AI to assess dealer axes
The fixed-income analytics specialist has developed a new tool to help buy-side firms decide if they’re getting a good price from their dealers.
TS Imagine integrates LTX’s pre-trade analytics tool
Users of the fixed-income EMS will now have access to LTX’s Liquidity Cloud tool, which provides a pre-trade score for the likelihood of trading success.
European exchanges turn to dark trading in battle for flow
The EU’s two biggest exchanges are launching dark pools this year. The apparent change in their stances on dark trading reflects a profound shift in equities markets.
After contentious Opra upgrades, vendors brace for a faster future
Upgrades to the datafeed widely used to gauge the current market price for options contracts went into effect in February after three separate delays, which market participants say were caused by persistent bandwidth issues at some important recipients.
The IMD Wrap: No more turf wars, or why CDOs should heed the Voice of the CTO
Max reviews how our recent Voice of the CTO series has implications for those beyond a firm’s technology function, and how communication and collaboration between tech, data, and leadership will deliver better results.
Dark horse: Deutsche Börse building dark pool
New functionality allowing exchange members to execute sweep trades comes hot on the heels of European rival Euronext launching its own dark pool.
Waters Wrap: The tough climb for startups
Anthony speaks with two seasoned technologists to better understand why startups have such a tough time getting banks and asset managers to sign on the dotted line.
European firms prime for lopsided settlement in North America and at home
With T+1 imminent in North America and increasingly likely to traverse the Atlantic, operations and trading professionals in Europe are fighting on two fronts.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest