BATS founder says exchange should renew IPO in 2Q
NEW YORK—The founder of BATS Global Markets says the US exchange that withdrew its public offering on Friday after an embarrassing computer glitch should pursue a “credible” IPO plan in the second quarter. Dave Cummings, who founded the BATS exchange and was its CEO till 2007, said in an e-mail sent yesterday to people in the industry that it was a “freak one-time event,” because the computer programme needed for an IPO was new. He said such bugs can easily be fixed, but recommended that all bonus plans at BATS should be suspended since “mistakes cost money.”
A BATS spokesman said Cummings’ opinions are his own and the company has “absolutely no comment” on the e-mail. Cummings sits on the board of BATS and is the owner of electronic trading firm Tradebot Systems and technology investment firm Tradebot Ventures. He also owns a stake in BATS.
On Thursday BATS’ initial public offering of its own stock was priced at US$16, the low end of what the company had originally predicted. Shortly after starting to trade on Friday, the share price plunged to just pennies because of technical issues, according to the exchange. Trading in the stock was halted. By late afternoon, BATS withdrew its public offering and said it had no plans to refile its IPO. All trades made were to be cancelled. The botched IPO was a blow not only to the exchange, but to its own plans for the IPO business.