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:


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.

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Tue, 04/01/2014 - 19:56 | 4615529 hobopants
hobopants's picture


Tue, 04/01/2014 - 20:16 | 4615574 knukles
knukles's picture

Not a bit.
Just like the foolish guys who rob Tiffany's with no clues left behind.
They then start to live BiG and Viola, call attention to themselves.
Plus these guys musta not made enough campaign contributions.

Greed, avarice false pride and narcissism

Tue, 04/01/2014 - 20:29 | 4615615 A Nanny Moose
A Nanny Moose's picture

"Plus these guys musta not made enough campaign contributions"


I find it tragic, that in this age of instantaneous information, outrage still awaits the goddamed book signing.

Tue, 04/01/2014 - 20:51 | 4615689 AlaricBalth
AlaricBalth's picture

Among the current stockholders of Virtu who won't be cashing out quite yet are the controversial former NYSE chairman Dick Grasso and Ret. General and current CFR member John Abizaid. Grasso is infamous for his $140 million deferred compensation pay package from the NYSE.

Here is a link to Virtu's S-1

"Virtu is a leading technology-enabled market maker and liquidity provider to the global financial markets. We stand ready, at any time, to buy or sell a broad range of securities, and we generate revenue by buying and selling large volumes of securities and other financial instruments and earning small amounts of money based on the difference between what buyers are willing to pay and what sellers are willing to accept, which we refer to as "bid/ask spreads."

Tue, 04/01/2014 - 21:39 | 4615827 What does it al...
What does it all mean's picture

The trading market is rigged and the IPO market is even worse!

Fundamentally, what does one get when one "invest" in virtu? Their revenue stream? Profit sharing?

Or just ways for Viola, Cifu, and other jokers/insiders to cash out on grandma's dime?

It is always rigged!!!

Tue, 04/01/2014 - 19:59 | 4615536 agb
agb's picture

Let's not get too cocky.  Citadel, the TBTF banks, and tradeworx will all be exempt from investigation.

Tue, 04/01/2014 - 20:05 | 4615550 NoDebt
NoDebt's picture

Of course.  When the plane is losing altitude you throw the cheap shit out the hatch first.

Tue, 04/01/2014 - 20:01 | 4615539 Judge Crater
Judge Crater's picture

Virtu Financial update: APRIL FOOLS!  We were just joking about the IPO delay.

Tue, 04/01/2014 - 20:03 | 4615545 NoDebt
NoDebt's picture

They should call up BATS and go get stinking drunk together.  Really nothing left to do at a time like this but down a bunch of tall, cold ones and commisurate about what could have been.

Then maybe they could do US a favor and drive off a bridge on the ride home.

Tue, 04/01/2014 - 20:09 | 4615557 cougar_w
cougar_w's picture


Tue, 04/01/2014 - 20:35 | 4615638 the question
the question's picture

I'm with cougar, that one had me laughing out loud

Tue, 04/01/2014 - 22:07 | 4615896 NoDebt
NoDebt's picture

Thanks, guys.  I subscribe to the Erma Bombeck theory of humor: "I just tell the truth, if you happen to find something funny in it, that's your problem."


Tue, 04/01/2014 - 20:04 | 4615549 Aknownymouse
Aknownymouse's picture

Bullish. Perfect time to buy the latest dip.. o Wait

Tue, 04/01/2014 - 20:16 | 4615553 cougar_w
cougar_w's picture

Queue the lawsuits.

"this new breed of predatory behavior gives a small segment of the industry an enormous advantage over all other competitors."

But isn't that BAU? I don't see how he can actually leverage that statement into an indictment.

Also also don't see how this can ever be regulated. They can try to ban certain algos (assuming they can even identify them as such) but they can't do much about lo-latency network routing arbitrage. That's what the exchanges do -- route orders -- and the big trading houses running their own trades will always have an advantage.

I think what happens now is the AG blusters around and acts important, after 9 months they knock down some small fry algos or outfits, and then let the network arbs continue to do what they do because that's just how asymmetries work.

Tue, 04/01/2014 - 20:10 | 4615565 buzzsaw99
buzzsaw99's picture

Virtucon alone makes over 9 billion dollars a year. [/number two]

Tue, 04/01/2014 - 20:11 | 4615566 Itch
Itch's picture

This is the part where they start unloading it all to you.

Tue, 04/01/2014 - 20:13 | 4615569 gimli
gimli's picture

You forgot one,

GS is going into the nailgun business .... they have found multiple uses for this device in the financial industry,

considering it a vital tool to " close the deal "

Tue, 04/01/2014 - 20:17 | 4615576 knukles
knukles's picture

Well that puts the finishing touch on it.

Tue, 04/01/2014 - 20:23 | 4615592 gimli
gimli's picture

They really make a lot on the refills.

Tue, 04/01/2014 - 20:41 | 4615658 gimli
gimli's picture

..... and they can also orchestrate quakes. Tsunamis cost extra.

Tue, 04/01/2014 - 20:14 | 4615573 Kaiser Sousa
Kaiser Sousa's picture

this is what ive been tryin to and of itself the Lewis "revelations" may ignite only grand standing by the complicit and banker controlled regulatory agencies...but the most powerfull element which lies at the heart of the MoneChangers stranglehold on the markets and the sheep is CONfidence...

it has left the buliding even though the majority still dont understand the nature and magnitude of the entire fraudulent ponzi debt based paradigm...

but they r slowly learning ass that burning sensation emanating from their hind quarters is becoming to painful to ignore...


then u will really see their desperation and and phychosis on display...

we really do have the power if we only choose to apply it...


Tue, 04/01/2014 - 20:19 | 4615580 cougar_w
cougar_w's picture

There are a lot of fund managers who are stuck (for whatever reason) trading stocks as part of their portfolios. As long as 401Ks are being traded at multiples on the exchanges the algos will have plenty to play with.

Tue, 04/01/2014 - 20:26 | 4615597 Kaiser Sousa
Kaiser Sousa's picture

fuck the fund managers man...

think about it...after all thats happened who in their right fucking mind still believes that they r best served by allowing people who couldnt give a rats ass about whether u or anybody else dumb enough to hand over their finances to Fraud St. eats or not???

the individual must assume his responsiblity...EXIT THEIR RIGGED CASINO...

Physical Gold and Silver can and must be bought..........

Tue, 04/01/2014 - 20:59 | 4615711 cougar_w
cougar_w's picture

Yes the fund managers are fuck'd, I think they get that part. Don't stand on the sidewalk under high buildings without an umbrella:

Tue, 04/01/2014 - 20:36 | 4615642 WhackoWarner
WhackoWarner's picture

It is the only way,  Buy your wealth and keep it within your supervision,  Money out of theiving banks. Leave no deposits or size. Anywhere.  No captive money. Just what you got at the other end of the gun.


This is getting to the end game. And little folks will be led like a herd into poverty.

Tue, 04/01/2014 - 20:38 | 4615647 the question
the question's picture

This is the End ... my only friend ... the End.  - Jim Morrison

Tue, 04/01/2014 - 20:40 | 4615655 The Axe
The Axe's picture


Tue, 04/01/2014 - 20:42 | 4615663 nakki
nakki's picture

You think its bad now wait until everything is trade OTC or through dark pools and one day you wake up, the S&P is locked limit down for a week, exchanges are closed and there is only 3 banks left. They all need 5 trillion dollars to cover all their and others derivatives. That's when we all go back to being serfs.

Tue, 04/01/2014 - 23:26 | 4616071 StateofFraud
StateofFraud's picture

Farm. Gold. Silver. Wine. Go ahead, make my day.

Tue, 04/01/2014 - 21:04 | 4615725 Clowns on Acid
Clowns on Acid's picture

So did somebody say "clawbacks" . from the HFT guys ?

Tue, 04/01/2014 - 21:06 | 4615729 cirrus
cirrus's picture

The funny thing is the trading records of GS and JPM (and a couple others) are just about as perfect as those of Virtu. All we hear from the gov't and media is crickets....

Tue, 04/01/2014 - 21:13 | 4615732 Downtoolong
Downtoolong's picture

As one Goldman tentacle releases its lifeless victim, another one grabs hold of new prey; soft at first, to soothe and avoid alarm, but then tighter, and tighter, and tighter, and……

As for Virtu, maybe they can still come back after morphing into some kind of social network for HFT research. You know, kind of like Steve Cohen’s expert networks for Biotech. Think about it, it would be the only social network that the NSA can’t monitor; there isn’t enough computer capacity in the world to store all the bogus quote data.   

Tue, 04/01/2014 - 21:08 | 4615738 ToNYC
ToNYC's picture

Brad Katsuyama's magic shoebox cleaned their Clock.

Tue, 04/01/2014 - 21:13 | 4615750 FreeNewEnergy
FreeNewEnergy's picture

While I appreciate the sentiments of Kaiser, just us few buying gold and silver isn't going to change the game. Public outrage must be a part of an ongoing exposure of the frauds of Wall Street, but, up until today, the banks are still winning. Maybe Lewis' book is a turning point and Schneiderman's investigation will have teeth, though, considering his track record, re: AG settlement with banks on mortgage fraud, i am not holding my breath.

The good news is that this Virtu IPO may not go off at all, ever. These guys are trying to cash in big time on just basic thievery, nothing more than that, and no wonder the bitch, Grasso, is in on it (I truly despise that bald fuck).

Take a look around, though. Nobody trusts Wall Street, or the federal government (thanks, NSA, Obama, Kerry, Hillary, Putin, Snowden, etc.). The American public is wide awake, but feels powerless, though I have the gut feeling that regular people are just getting more and more pissed off every day and that this shithouse is gonna blow any minute. There's just too much CRAP out there, from Obamacare to GM, to HFTs, to the everyday, ordinary theft that Wall Street executes.

And the S&P made another all-time high today while Fed Chair Yellen wore a welder's mask, marking her as a cross between Darth Vader and Michael Myers. Fitting, I think...

Keep fighting, folks. It can't go on forever like this and payback's going to be a real BI-ATCH! Can't fucking wait.

Tue, 04/01/2014 - 21:17 | 4615762 Milton Waddams
Milton Waddams's picture

Grrrrrrreeeeeddd. How difficult would have it been to sprinkle in 10%-15% of losing days, even relatively small ones, for that sake of the appearances? LOL nouveau riche.

Tue, 04/01/2014 - 21:27 | 4615785 Baldrick
Baldrick's picture

BoooooYaaa mutha fuckahhhssss!

Tue, 04/01/2014 - 21:42 | 4615834 pndr4495
pndr4495's picture

I wonder what Brookesley Borne has to say about all this poison coming out of the mud. 

Tue, 04/01/2014 - 22:05 | 4615888 GumbyMe
GumbyMe's picture

No worries. Give the SEC, FBI, and any state AG a few weeks to come up with decent cover up story, and the legalized criminal activity can resume without fear or further inquiries.

Tue, 04/01/2014 - 22:32 | 4615951 dexter_morgan
dexter_morgan's picture

I thought fauxcohontas was elected to clean all this shit up? Honest Injun.

Wed, 04/02/2014 - 01:18 | 4616230 dontknowcrapabo...
dontknowcrapabouteconomy's picture

so GS got all their bases covered. That's some pretty fucking smart people up there...and evil.

I don't like where this is heading.

Wed, 04/02/2014 - 03:12 | 4616352 zipit
zipit's picture

God's work.

Wed, 04/02/2014 - 05:37 | 4616463 A_Nejad
A_Nejad's picture

what did you expect of "chosen" people ;)

Wed, 04/02/2014 - 06:59 | 4616515 Waterfallsparkles
Waterfallsparkles's picture

You have to know when they are selling the Golden Goose that lays Golden Eggs that something was comming.  Why on Earth would you sell a platform that makes that much money without losses?  Unless of course if the Goose was dying.

Wed, 04/02/2014 - 07:10 | 4616524 RazvanM
RazvanM's picture

There's no such thing as unhappy end if you steal money for 6 years, get caught and pay some small protection fees, then the story erupts finally to the public and you receive a slap on the hand and a wink, wink, wink, then your current shop is not closed yet. If such a company wants to IPO itself, it means that the business is getting cold.

Wed, 04/02/2014 - 08:14 | 4616619 Mediocritas
Mediocritas's picture

Virtu was originally intended to be called Virtue, but when they were typing it out one of the bots front-ran their keystrokes and scalped the 'e'.

Wed, 04/02/2014 - 08:51 | 4616782 Cacete de Ouro
Cacete de Ouro's picture

"Virtu’s bankers won’t start marketing the initial public offering until after April 20" (Easter Sunday)

Looks like the bankers are expecting a miracle of the Resurrection

Wed, 04/02/2014 - 09:35 | 4616971 detached.amusement
detached.amusement's picture

...with a joint in hand...



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