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KCG Holdings, Inc. Message Board

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  • pmoishe pmoishe Dec 23, 2009 10:49 PM Flag

    My Thoughts on NITE ... Confused!!

    If you are really looking for some thoughts and not to flame an honest opinion, here goes:

    You are probably OK buying at that level. Looks like there is some support there. But I am not sure that the very negative regulatory environment is priced into the stock. Don't forget, this stock was crushed (probably over-done) off its last earnings statement. It had just made new highs, looked like it was off to the races with $25 in sight and then it fell apart. It has every right to snap-back a few points after that debacle. However, the trading environment is not good. Trading volume is down for everyone (lots of stories in the WSJ on the subject). Margins for NITE are very tight as they trade lots of low-priced stocks with narrow spreads. Dark pools and flash trading are in the regulatory cross-hairs (NITE is a big player in both). A transaction tax is also being kicked around in Congress. Joyce has said they are making big investments overseas and in new technology but admits they will not pay off for 2-3 years. With $4/shr in cash and little debt there is definitely some value there. But, it is hard to imagine that any logical acquirer would take a run at it now (that was not the case 6+ months ago as it was a logical target). At $6-$9 a takeover would be compelling. All in all, this stock is probably a sell on any further strength. It is definitely a trade in this environment and not a long-term play. It will be a long time before it see $22+ again. That's my take on it and I've been trading this one for a long time now.

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    • I've done some reading on the subject of dark pools and flash trading but haven't seen anything that accurately describes what the repercussions are if these two items would either be heavily regulated or done away with.

      Any insights on the impact to the markets (not just NITE) if these regulations went into law?

    • marduk1 Dec 24, 2009 12:01 AM Flag

      this stock will never see 6 or 9, and 15 is a very attractive price plus premium for a takeover. there wont be a trabsaction tax, wall street owns the politicians and its bs grandstanding. forget regulation too, if you think the street will let govt restrict their crooked ways, youre being too naive. Post your short and at least try to appear objective. See you at 17 next week.

      • 1 Reply to marduk1
      • There are a lot of traders on the street who only wish they owned the politicians as their bonuses now fade into the sunset of government control. The mood for increased regulation is real and one never knows what stupid laws will come out of Congress. Nobody will pay a premium for NITE in this environment. Stop wishing that everything was fine for NITE, which it is not, and try to think rationally for a moment.

12.33+0.22(+1.82%)Oct 8 4:03 PMEDT