IOpen Company Day are usually a day of joviality for game owners of the company and the breathless public shareholders that participate. It takes a lot to do an IPO. You have to have a successful company, a great product, and great management. It takes years to do it sometimes. There are several steps growing a business. But overall, it is a very big achievement to see your company go public unless something goes wrong when it does go public.
BATS is fairly new in the stock exchange business. It competed with the New York Stock Exchange and Nasdaq’s of the worlds. It is also a niche player with high frequency traders. Those are the types of traders that trade very quickly. BATS had an infrastructure that was top-of-the-line and that HFT’s liked. High frequency traders also helped BATS become a powerhouse exchange with all the volume and fees involved. It helped BATS so much they became a major stock exchange in the US.
Some of BATS major clients are high frequency traders. The exchange gets most of its volume from them. Because the traders trade so fast they usually are not human, they are robots. Eventually it comes down to robots trading with robots. That’s the environment that lots of exchange are working in now.
On the first day that BATS goes live with its IPO, the robots got its hands on it. They flashed it out to a penny. On the first day of an IPO you don’t necessarily want your stock going down to one penny. You want your stock to go up in value not down. Why is this so important? Because this is showing how broken the US equity markets are.
Raising capital is not only difficult in a regulatory point of view but it is difficult in a shareholder point of view. These problems are leading to a new era of crowdfunding. Do companies really even need to go to the public markets and have robots flash their stock to a penny? Crowdfunding will become an alternative to this night mare.
Crowdista Fundistica talks about the banking markets and business start up loans . She also authors about some of the finding investors gossip of the weekend. On her months off she fishes on the strand and does yoga.