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November 1, 1999

Sales Assault Makes An Electronic Debut: Sales Traders, Analysts and Resear

By Peter Chapman

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  • Sales Assault Makes An Electronic Debut: Sales Traders, Analysts and Resear

Early last month, an analyst at C.E.Unterberg, Tow- bin doubled his price target for a stock called Puma Technology, a communications software publisher. Puma Technology was planning an acquisition, putting it on course to duplicate Phone.com, a successful industry peer. That company has seen its stock price rise from about $30 to $230 since its initial public offering in June. (At press time, the acquisition was still pending.)

In what is becoming standard practice at many broker dealers, Unterberg Towbin launched a team-based sales assault on its buyside clients to spread the word of a potential new Phone.com success story. Sales trading coordinated its efforts with research and equity sales.

The strategy worked. By the end of the day, Puma had shot up $4.50, or about 25 percent from its prior-day close of $17 3/16.

"You can be sure that our sales traders made sure that the trading desks at major accounts had that message at the same time as the research sales force and the institutional sales force was delivering that message to their counterparts [at the same accounts]," said Mitch Meisler, Unterberg Towbin's executive responsible for coordinating the sales efforts of the three divisions. "As long as I've been in the business [team selling] has been the holy grail. It's what you hope for. It's what you aspire to."

Hoping to capitalize on the team-based sales trend, Thomson Financial's First Call has introduced an Internet tool called "Integrator" that supports a broker dealer's unified approach to account management. The product combines standard contact management software with database search capabilities. (Thomson Financial is the parent company of Securities Data Publishing, the publisher of Traders Magazine.)

The contact management application allows analysts, research salespeople and sales traders to access account information and to communicate with each other via notes. Contact management software is a staple among salespeople. ACT!, by Symantec, is the biggest seller in the U.S. of contact management software.

Integrator provides access to two types of databases: one with buyside contact data and another with institutional shareholdings data. The contact data includes the names of portfolio managers, analysts and traders at over 4,000 global institutions. Shareholding data consists of the securities holdings of those same money managers.

Both data sets have been on the market for years in various forms. Technimetrics and Nelson Information, both units of Thomson, sell the contact data. CDA Spectrum, also a Thomson unit, and Technimetrics sell the shareholding data.

The shareholdings database can be queried by the market capitalizations of the stocks. Queries can include the manager's investment style, such as growth or value and other queries can be by the sectors in which they invest, such as energy or healthcare; and by the global regions in which they invest. Users can also determine whether a money manager has been a buyer or seller of a particular stock over the most recent quarter.

Integrator's product manager John Murphy touts the ability of a sales trader to add a client's "interest list" to the system. An interest list includes those stocks an institutional trader owns and wants to monitor or those he doesn't own and may want to trade.