Liquidnet to delay IPO until 2010
TOKYO (Reuters) - Trading platform Liquidnet will delay its plans to go public until 2010 due to poor market conditions amid the global financial turmoil, the U.S. company's chief executive said on Tuesday.
Liquidnet Holdings Inc had originally planned to conduct an initial public offering by the fourth quarter of this year and sell up to $500 million of its common shares.
"Back when we filed to do an IPO, Citibank was trading at $50, Goldman Sachs was at $150 or something ... a lot has changed since we filed (in July)," Seth Merrin, founder and chief executive, told Reuters in an interview.
"My guess is probably it would be sometime in 2010," he said, referring to the IPO.
Merrin said financial stocks would need to stage a strong recovery before Liquidnet could consider a bourse listing.
"The financials -- our public comparisons -- have been hurt the worst, so we are going to be priced on those comparisons, and those comparisons have to come back, too," said Merrin. He was in in Tokyo to meet Japanese clients and attend a seminar held by the company's Japanese subsidiary, Liquidnet Japan Inc.
Global stock markets have tumbled since July on concerns over a worldwide economic downturn and corporate failures such as the collapse of U.S. investment bank giant Lehman Brothers.
The Dow Jones industrial average .DJI has fallen more than 30 percent since July 2, when Liquidnet filed for the IPO.
Liquidnet, founded by Merrin in 1999 and partly owned by its employees, manages electronic networks that let institutional investors anonymously trade large blocks of shares without traditional brokers and exchanges.
The company has become a top-10 broker in the United States and Europe, taking advantage of the accelerating shift from human trading to faster, less costly electronic systems.
Merrin said he would take a cautious attitude on business strategy when uncertainty in the market is growing.
"We are going to look at our spending more carefully. We are not the type of firm that believes in layoffs, so we are not going to cut staff," Merrin said.
"We are going to slow up the hiring until we can see what's happening with the market."
Liquidnet sees potential in the Asian region after starting trading the Hong Kong, Singapore, South Korean and Japanese markets last year.
But the brokerage needed to solidify those markets first before expanding to other countries in the region, Merrin said. Continued...
