They got upfront cash and an earn out going forward. ETG is profitable and has been for the last 12 months at least. As far as I know 5 million shares is accurate. They can make money by cutting costs and cutting losing traders. Monthly overhead is now 1/3 what it was when he took over. Also, they have always had good traders who were well trained and made money. ETG got 10% of that P&L. I spoke to Jeff recently and he confirmed this. He told me that existing traders would have the choice of keeping their ETG deal or switching to a Schonfeld deal. Traders will have access to more capital than before where it was a strict ratio of bp to money up. He said he left in July thinking the deal would have been signed by then. Schonfeld offered him a position, but he felt it was time to let Blethen and Greg move up and to not have his salary be a cost to the business.
Anyone have any information about ETG's Atlanta location and its traders? Did this office already close down? Did the traders there have the option [presumably on an individual basis] to go remote or relocate to NYC office? Any info would be greatly appreciated. I know that Bright's Atlanta address [essentially an empty office with just a couple guys "trading"] recently boxed all equipment up [for shipping to headquarters in Vegas] and closed its doors -- they had been locked into multi-year lease which is almost up, otherwise I'm sure this location would have closed quite a while ago. Thanks much.
If you think 5 million shares a day would put you out of business you know very little about this business, and/or their business model. That's 100 million shares per month. Don't comapre them to firms doing NAZ rebate trading where each share traded counts as vitually nothing. You also need to conside their low overhead.
ETG's Atlanta office is thriving. They have at least 25 guys there. Bright's office I heard had reopened. I guess that didn't last. Bright has let many leases lapse and closed the offices then. Makes a lot of sense. guess Hot 'lanta is another one.
I believe by mid-August everything [computers, phones, desks, chairs, etc] had been removed. I think their lease doesn't expire until end of 2005 or Q1 2006. I'm not sure when Bright originally opened this Atlanta office but from recollection I think that it just fizzled. Then they hired new office manager, some chump who had been trading at ETG, and Bight ran advertisements on CNBC [not sure if just local Atlanta or nationwide] and Bright brothers flew into Atlanta back in 2002 for a week or so to have an "open house" to attempt to fill the chairs [Office capacity could fit about 25 or so]. I believe nothing materialized and so lights were shut off and it stayed empty for a couple years or so, all the while with all the computer equipment and desks & chairs etc. Then, perhaps in late 2004 or so, they hired a guy who had been options trader on CBOE but who was essentially retired [my guess] but he just needed a place to be during the day so that his wife could have the house to herself [that sort of thing -- all I'm getting at is that he really didn't need to trade/work, that this just gave him something to do]. An individual from Trade-Ideas.com [an alert service, pretty good one too] was also sub-leasing space [from Bright] in this office, perhpas even before the "office manager" came aboard. So this "office manager" guy wasn't doing anything to recruit or anything, just probably made some arrangement with Bright where he got office space to do his thing, and Bright had someone in their office so that if anyone wanted to "sign up", they could. And, of course, there were no takers, other than an artist who had caught the trading bug i guess, and with the lease close to expiration, they just boxed everthing up etc. I had partnered up with a friend and we were using Bright for access and that office space but were not doing Bright-style/method day-trading.
Well, I think "thriving" is far from the case, and certainly more hype/propaganda than accurate description. Anyone that knows what's really going on or is knowledgable about proprietary shop politics knows what "thriving" means here.
thanks for the info.... definitely sounds like you have first hand knowledge of both firms. i too am skeptical of the usage of the term "thriving."
If anyone really wants to know about Atlanta, they can always call and ask me rather than speculate. Some of the above is true...we essentially shut it down when we worked a deal to not pay the lease for a period of time...but when we had to pay for a while, we thought we would see if there is any traders around. After talking with Jeff Mester (ex CEO of ETG), we pretty much concluded that we would close when the lease came up. Not a pretty story, but not a big deal either. All the best, Don