This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Deal: BATS, Direct Edge Take Swing at Incumbents

Stocks in this article: NDAQ

BATS attempted a float last year of 6.29 million of its shares, anticipating an offer price of $16 to $18. However, it scrapped the IPO due to problems in its trading system. Ratterman was stripped of his dual role as BATS chairman and chief executive around the same time--though the board supported his ongoing service as CEO.

BATS posted EBITDA of $101 million in 2012 and an EBITDA margin of 65%, according to a company spokesman. Its owners include Credit Suisse (CS), Citigroup (C), JPMorgan Chase (JPM), Deutsche Bank (DB), Morgan Stanley (MS), Nomura and KCG Holdings.

Citadel LLC and International Securities Exchange LLC hold stakes in Direct Edge.

BATS and Direct Edge were established by trading firms and banks to run platforms with cheaper fees and what they claim is newer technology and better customer service compared to incumbents such as NYSE.

Last week private equity players Spectrum Equity Investors and TA Associates Management bought a combined 12% stake in BATS. Direct Edge was last year reported to be in talks to be acquired by Canadian exchange operator TMX Group Inc. before a group of Canadian banks bought TMX last September.

BATS also operates a U.S. equity options market and the largest stock exchange in Europe, BATS Chi-X Europe. Direct Edge is aiming to expand internationally by opening an equity market in Brazil. BATS was advised by Broadhaven Capital Partners while Direct Edge was advised by Bank of America Merrill Lynch and an Evercore Partners (EVR) team comprised of Jane Gladstone, Scott Patrick, Jin Lee, Andrew Steinberg, Shawn Ng and Meghan Mirchich.

Written by Jane Searle

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs