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Forget Michael Lewis and His Flash Boys, Virtu is Going Public Anyway

Leave off the last E for irony.

So, Michael Lewis is still pretty in love with his best-selling hot take on the unfairness of high speed trading.

This time last year, the bestselling author brought Wall Street to a standstill, and the book that caused the trouble continues to send shockwaves through the financial system.
Flash Boys tells the tale of a Canadian financial services executive, Brad Katsuyama, who spotted a gigantic ripoff in the financial markets and set up a company he hoped would end it. The book struck gold – Lewis has sold more than half a million copies in the US alone. The paperback has just been released along with an update from Lewis detailing just how enraged Wall Street remains.
“I knew this was a bombshell,” Lewis said. But even he was taken aback by the speed with which the FBI, Justice Department and others moved to comment on the situation. “It was louder than anything I had experienced.”

But the operative word in all that ego-stroking appears to be "paperback." Turns out that more than a few people have already forgotten the explosive impact of Flash Boys, and some of them work at one of the book's favorite targets.

Virtu Financial disclosed on Monday that it hopes to raise as much as $313.5 million in its initial stock sale by selling shares at $17 to $19 each. At the midpoint of that range, the company would be valued at about $2.5 billion.
In restarting its I.P.O. process, Virtu is betting that the furor over high-frequency trading — in which computer programs buy and sell shares in milliseconds — has died down. The firm had been deep in the process of going public when Mr. Lewis’s “Flash Boys,” a literary broadside against an industry that it depicted as having rigged the stock markets, emerged with much fanfare.

Virtu re-revving the engine on its multi-billion-dollar IPO is a sure sign that a lot of folks on the street are betting big that Flash Boys is now as largely forgotten as Lewis' book on parenting. A cursory look at Virtu's financials show that it might be a pretty smart bet.

Over all, Virtu earned $190 million last year, up 4 percent compared with results in the previous year and more than double what it earned in 2012. Its total revenue last year was $723 million, up 8 percent from the year before.

That's a nice chunk of ill-gotten gains. It's definitely enough to attract the attentions of lead underwriter Goldman Sachs, and also likely enough to boost Virtu's rep going into a pre-pre IPO roadshow phase that will culminate in stock becoming available at the end of April.

But hey, it's not all bad for Michael Lewis today. After all, it's baseball's opening day and the owner of Moneyball can take comfort that no team is still dumb enough to overpay an aging, pharmaceutically-enhanced power hitter.

Michael Lewis: 'I knew Flash Boys would be a bombshell' [The Guardian]

Virtu, a High-Frequency Trader, Resumes Its I.P.O. [NY Times]



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