Goodbye HFT: Virtu "Delays" IPO In Aftermath Of Michael Lewis Book Furor

Tyler Durden's picture

We know what you're thinking... why didn't Virtu Financial's CEO Chris Concannon ban Twitter and YouTube? It seems that is the only thing the HFT firm is incapable of as just too much public scrutiny from various fact-full blogs and a major expose of the reality of the US stock 'market' was too much for even the greatest fools in the market to be fooled by:

  • VIRTU SAID TO DELAY IPO AMID FUROR OVER MICHAEL LEWIS BOOK

As we warned previously, it was only a matter of time before the hubris of VRTU's own trading perfection swung around and crushed it: "Simply put, first it was their boastful trading record that got the NYAG involved, and then Lewis slammed the door shut."

Bloomberg reports,

Virtu Financial Inc., the high-frequency trader that announced plans last month to sell shares, has delayed the deal, two people with knowledge of the matter said.

 

Virtu’s bankers won’t start marketing the initial public offering until after April 20, delaying the process from this week, according to the people, who asked not to be named because the decision is private.

 

Chris Concannon, the president of New York-based Virtu, declined to comment on the IPO.

Here is what we said just 24 hours ago,

So does Goldman know something the rest of us don't that it is now ready to give up on the HFT goldmine which lost money on just one day in 1238? Why of course it does. And one would imagine that judging by the dramatic turnaround exhibited by Goldman that said something is very adverse to the ongoing future profitability of the HFT industry. The amusement factor only rises by several notches when one considers that Goldman also happens to be lead underwriter on the Virtu IPO offering: one wonders what they uncovered and/or what they know about the industry that nobody else does, and just how the VRTU IPO will fare now that Goldman is so openly against HFT.

After the NY AG got involved...

It seems the blatant unveiling of the HFT market's Holy Grail trading - Virtu (1 loss in 1238 days) - has raised some attention as Bloomberg reports, NY AG Eric Schneiderman has opened a broad investigation into whether U.S. stock exchanges and alternative venues provide high-frequency traders with improper advantages. As one European lawmaker noted, "the area of high-frequency trading is lacking suitable regulation," and Schneiderman warned "this new breed of predatory behavior gives a small segment of the industry an enormous advantage over all other competitors."  We wonder how this will affect Virtu's IPO given regulation is risk factor #1!

Some advice: in the revised VRTU HFT, change the above table to show one day of profits and 1237 days of losses - that way you won't get the regulators after you. Oh and, when re-IPOing just use Goldman's Sigma X dark pool. It's not like anyone uses lit exchanges anymore.

Once again it would appear Goldman Sachs had every base covered and just had to pick a winner...

GS is an investor in IEX (the new non-HFT exchange);

 

GS was an original investor in DirectEdge;

 

GS owns the largest dark pool - Sigma X; and

 

GS was supposed to be the lead underwriter on the VRTU IPO.

The squid is back, long live the squid...

As we humbly said before:

So, dear HFT firms, enjoy your one trading day loss in 1238. Those days are about to come to a very abrupt, and unhappy, end.