Want to know more about the company that set the Friday MAy 9 pump show on the road?
All above board - it’s a public company !
Market Maker, Virtu bought more than 3.5 million shares on that Friday and followed up with around 5.3 million on Monday May 12.
Then it applied oressure again with 2.6million on Thursday May 15.
The lever to get the show in motion for those shark-minded institutions .. and - as anatoly - has pointed out, for a mess of large private holders wanting to decrease their positions to eager retail caught up in the excitement?
That’s what Virtu does.
That’s why it’s called a ‘market maker’.
Here’s the trade history stats for that exciting week:
View attachment 7025931But, curiously the Commsec chart only shows massive volume of around 50 million shares on the morning of Friday, April 16.
I guess that volume came from a different party to the ones doing the pump and dump ‘soft shoe shuffle’ (the ones who - according to what I think
@slick noted, may even have been coordinated into a ‘pack’
Maybe it was a
few opportunistic retail holders?
Anyway the overall volume of those days was NOT reflected on the chart below and maybe that’s because Commsec didn’t pick it up.
I kniw it doesn’t ‘see’ dark pool trades, and that’s the world the BEOT has access too with Virtu known as a ‘star diver’.
View attachment 7025946Anyhow it’s all most interesting to think on, and overall the apparent lever, Virtu, played quite a small part,acquiring around 11.5million shares over the course of the pump and dump.
FWIW to anyone else, here’s a bit more information;
cheers
https://*.com.au/virt-stock/View attachment 7025916
One of only two listed market makers in the world, Virtu Financial is the only listed liquidity provider in the United States – and they account for a whopping 9% of US stock trading.They operate in the murky world of dark pools, where wide spreads and increased volatility are the conditions in which they thrive. As a facilitator of trades through the New York Stock Exchange (NYSE), Nasdaq and Chicago Board Options Exchange (CBOE), Virtu takes orders from brokers who receive them from traders, and attempt to fill the order at a better price than what is available in the bid/offer spread through an order they might have from another broker – and clip some of the difference.The activity in US stock trading that occurs in this ‘off-exchange’ manner has been growing for many years, and has experienced a surge in the last few years that has furthered fueled the values of firms like Virtu and Citadel. Off-exchange trading accounted for 36.8% of total volumes between 2018-19, a figure that grew to 44.5% in the first half of 2021.Andrew stated that “What these guys benefit from are two things. First of all, a large bid/offer spread, that tends to be brought about by higher volatility, and secondly – volume.” This is especially true when the market is running hot.
Andrew explained that “They make enormous returns on invested capital (ROIC) when times are good”, which was particularly evident during the end of 2020 and start of 2021 – where ROIC cracked over 40%.
To grasp just how much money this can mean for Virtu, a crucial metric to gauge is their adjusted net trading income (ANTI). Since they got to their current structure, this figure has averaged around US$6 million per day. However, in the last week of March 2020, when the covid flash crash had bottomed out and markets were surging – their daily ANTI spiked to more than US$33 million. When retail investors were flooding into the market, including pumping meme stocks like GameStop – Virtu was raking in almost US$12 million of ANTI a day.
On top of yielding around a 5.6% dividend, the company has been aggressively buying back stock for the past few years – totalling almost 15% of their total shares on issue since the end of 2020.
There’s 163 million shares on issue, with around 94 million that are publicly traded. The business was founded by billionaire American businessman Vincent Viola, who remains their major shareholder. While Virtu is currently earning around a third of what it was at its peak, and SEC investigations into the operations of market makers will likely result in reforms that will weigh on earnings going forward – Andrew believes there will be no armageddon scenario for the company and their strict capital management will see them through to a better market and ultimately stronger earnings.
(20min delay)