@VirtuFinancial Pulls the Trigger on @KCG: Here’s Why…

@VirtuFinancial bid for KCG Holdings (@KCGHQ) today. Here’s why:

In the chart below, average daily adjusted net trading revenue for Q4-2016 returns to levels not seen since late 2013 / early 2014. Chances are quite high that persistent low volatility during Q1-2017 – which has only a dozen trading days left in it – has caused these figure to fall back to pre-2013 levels.

A situation like that needs a good distraction; something that can change the narrative and allow for lots of financial restructuring and restatements.  Voila! Try to take out one of your nearest competitors…

Problem is, it won’t work – even if the deal gets done. The cultures of Virtu and GETCO – the parts that are likely to fit together the most logically – won’t mesh. Knowing the founders and leadership, they are as different as New York and Chicago, as different as right and left.

Stay tuned…

 

By | 2017-04-28T09:57:45+00:00 March 15th, 2017|Alphacution Feed|

About the Author:

Paul Rowady is the Director of Research for Alphacution Research Conservatory, the first digitally-oriented research and strategic advisory business model focused on providing data, analytics and technical infrastructure intelligence within the financial services industry. He has 28 years of senior-level research, risk, technology, capital markets and proprietary trading experience. Contact: paul@alphacution.com; Follow: @alphacution.

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