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Tim Quast
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We're All HFTs Now

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May 31, 2000

OptiMark Tries Nasdaq Lifelife

By Sanford Wexler

OptiMark, which is scrambling to survive, is adding 49 Nasdaq stocks to its computerized block trading system, giving it 111 Nasdaq issues.

But many traders do not think it will improve OptiMark's performance.

Volume on OptiMark recently fell to about 105,000 shares daily, down from about 240,000 at the start of the year. OptiMark volume averaged 1.5 million shares daily in 1998.

"It's a long, hard process," said Bob Colgan, president of OptiMark. "But if you stick with it you are going to get there. Adding these Nasdaq stocks and changes we have put into place are things that our customers want."

OptiMark expects its alliance with Knight Securities, scheduled to begin this month, to help create a smoother interface with Nasdaq.

OptiMark is swimming in choppy water, however. According to its independent auditor, Deloitte & Touche, the firm lost more than $135 million in 1999. "[The] company's recurring losses from operations raise substantial doubt about its ability to continue as a growing concern," Deloitte & Touche said in a Form 10 registration statement it filed for OptiMark with the Securities and Exchange Commission.

Colgan is undeterred. "Any company in a start-up and build-up mode has to refinance itself at least once, if not, twice a year," he said. "I am not concerned about it."

OptiMark's investors include PaineWebber, Merrill Lynch, Goldman Sachs, American Century, Credit Suisse First Boston, BankBoston, as well as Nasdaq and its founder, William Lupien. An Optimark official has said the firm currently has about $35 million in cash while it spends about $5 million a month. He insisted the company has "plenty of cash," and enjoys support from its shareholders.