(Bloomberg) — Virtu Financial Inc. raised $314 million in its initial public offering, after the high-frequency traders shares were priced at the top of the marketed range.
Virtu sold sold 16.5 million Class A shares for $19 each, according to a statement Wednesday, after offering them for $17 to $19. The shares will start trading Thursday, listed on the Nasdaq Stock Market under the symbol VIRT.
The firm, which uses computerized strategies to buy and sell everything from stocks to currencies, shelved its original plan for an IPO a year ago after Michael Lewiss Flash Boys directed unprecedented scrutiny onto high-frequency traders. The book alleged they, together with Wall Street brokerages and exchanges, are making money at the expense of slower-moving asset managers.
The delay worked to Virtus advantage: Stock benchmarks are near record levels and two other IPOs — by companies as diverse as online craft marketplace Etsy Inc. and party supply company Party City Holdco Inc. — also priced at the top of their offering ranges Wednesday.
The higher pricings suggest that theres a high probability that companies tomorrow and later this week will be greeted enthusiastically by investors, said Jay Ritter, professor at the University of Florida, who tracks IPOs. That will encourage other companies to go public.
Some Defenders
Even in the height of the criticism following Flash Boys Virtu had its defenders. No major regulations were passed as a result of the scrutiny and two of the worlds largest asset managers, Vanguard Group Inc. and BlackRock Inc., defended aspects of high-frequency trading that they said reduce costs for investors and provide liquidity in the fragmented U.S. market.
The companys investors get the story, Chief Executive Officer Doug Cifu said in a telephone interview.
What we do is not a new function or service, Cifu said. We spent very little time discussing regulatory issues or controversies.
Revenue last year rose 8.8 percent from the previous year to $723 million, while net income was $190 million, up from $182 million in 2013, according to regulatory filings. That works out to a profit of almost $1.3 million per employee for the 148- person company.
Virtu, which on average completed 5.3 million trades a day last year, makes markets in more than 11,000 securities and other financial products, trading on more than 225 exchanges in 34 countries.
Crafts, Supplies
KCG Holdings Inc., born of a merger between high-speed trader Getco LLC and market-maker Knight Capital Group Inc., is the closest equivalent to Virtu. KCGs shares have gained 6 percent in 2015 after dropping 2.6 percent last year.
Etsy, the website founded a decade ago by a carpenter looking to sell wooden computers, is making its public debut as a $1.78 billion company. The marketplace for handmade and vintage goods raised $267 million in its IPO.
Party City, the largest U.S. party-supplies retailer, raised about $372 million. The company, which had initially filed to go public four years ago, is finally making its debut amid projections for a pick-up in consumer spending.
To contact the reporters on this story: Leslie Picker in New York at lpicker2@bloomberg.net;Sam Mamudiin New York at smamudi@bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net; Nick Baker at nbaker7@bloomberg.net Elizabeth Wollman
