@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…
