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Fri April 18, 2014
IPO Market Shows Signs Of Strain
Originally published on Fri April 18, 2014 9:10 am
DAVID GREENE, HOST:
All right, Virtu Financial has reportedly decided to postpone its initial public offering. The decision comes during a week when several IPOs in U.S. markets had disappointing debuts. Virtu conducts high-frequency electronic trading on various exchanges and scrutiny of high-speed trading is growing.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: New York-based Virtu Financial is one of the most profitable high-frequency trading firms around and one of the biggest. It was supposed to go public this month and was hoping to raise as much as $250 million. But the firm decided to put off its stock offering amid heightened scrutiny of high-speed trading. And yesterday The Wall Street Journal reported that the postponement would be indefinite.
High-frequency trading firms such as Virtu use ultra-fast computer networks to trade stocks. Critics say they bring volatility to the markets and the controversy has mushroomed after the publication of Michael Lewis's book, "Flash Boys."
Meanwhile, federal and New York State regulators are investigating whether some of the firms have an unfair advantage over other traders. The decision to postpone Virtu's IPO comes at a week when technology stock prices have been especially volatile, and that's taking a toll on the IPO market.
Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.