High-frequency trading could soon officially mint its first billionaire.
Vincent “Vinnie” Viola, the founder of Virtu Financial Inc., could have his stake valued at around $2 billion once the company sells shares to the public, according to two people familiar with the matter.
In a filing Monday, Virtu said it hoped to raise $100 million in an initial public offering, though that figure is just a placeholder that could change based on investor demand. The company will likely seek to raise between $200 million and $250 million, according to the people. At the high end of that range, Virtu would be valued at about $3 billion.
Mr. Viola owns almost 70% of the company.
Mr. Viola, a West Point graduate and owner of the Florida Panthers hockey team, is already wealthy, but the IPO would cement his status as one of the most successful figures within the high-speed trading industry.
Virtu is hoping that its stellar record – having just "one losing trading day" during a 1,238 trading-day period concluding at the end of December – will grab the interest of investors despite growing scrutiny of the high-frequency trading industry.
Virtu said in its prospectus that the U.S. Commodity Futures Trading Commission was "looking into our trading during the period from July 2011 to November 2013."
The CFTC is examining Virtu's "participation in certain incentive programs offered by exchanges or venues during that time period." Virtu said it didn't believe it violated any statute or regulatory provision.
The Securities and Exchange Commission has also said it is looking into the impact of high-frequency traders on market stability and fairness.
In addition, a French regulator, Autorité des Marchés Financiers, is examining the 2009 trading activities of a company that eventually became part of Virtu, the prospectus said.
Virtu declined to comment on the regulatory inquiries.
Virtu describes itself as an electronic market-maker and says its strategy of providing continuous quotes to buyers and sellers adds liquidity to the market. The company is "market netural," meaning it is not dependent on the direction of the market and does not make speculative investments.
That strategy has paid off in a big way. The company earned $182.2 million in net income in 2013 on revenues of $664.5 million, an increase in profits of 108% over the year before, according to the filing.
The biggest chunk of trading income came from U.S. stocks, which accounted for 27% of trading income, followed by 23% from global commodities and 20% from global currencies, the company said.
The IPO process will also shed more light on the leadership style of Mr. Viola, who rose from a pit trader at the New York Mercantile Exchange to become chairman of the company.
Virtu's board of directors includes former exchange heavyweights Dick Grasso, former chairman and chief executive of the New York Stock Exchange, and Jack Sandner, former chairman of the Chicago Mercantile Exchange. Retired Army Gen. John Abizaid, the former head of the U.S. Central Command, is also a member and advises the company on leadership.
An aficionado of military history, Mr. Viola has taken top executives on trips to the sites of the Battle of Little Big Horn in Montana and Pointe du Hoc, where Army rangers assaulted German positions on the coast of Normandy, France.
Mr. Viola gained attention last year after paying $240 million for control the Florida Panthers of the National Hockey League. He put his Manhattan mansion on the market for $114 million in December.
No comments:
Post a Comment