The X-Men of e-finance
In the heartland of Gotham and the Bay Area of San Francisco, dwarfed by the high-rise headquarters of those they seek to challenge, lurk a select few individuals waiting to strike. These men are behind the mutant companies seeking to change the dynamics of equity capital-raising forever. They are much smaller than their prey, but less weighed down by legacy systems. The time has come for the internet-based new issue houses to show what they can do, reports Antony Currie
New web-based securities Firms once evoked fear in their intended targets, but lack of immediate action has lessened the fear of the unknown. "Last year I was convinced that WR Hambrecht and Wit Capital were going seriously to threaten our way of doing business," says the head of investment banking at an incumbent bulge bracket Firm. "But now I just regard them as yet another small contender." Even one of the leading e-Finance analysts, Greg Smith at Chase Hambrecht and Quist, thinks that: "the era of the e-investment bank has faded somewhat".
The protagonists are hoping that their relative silence until now has lulled such people into a false sense of security, and look for inspiration to the success of their mutant cousins in the battle for secondary trading. Discount broker Charles Schwab led the way with on-line retail trading, followed by rival TD Waterhouse and start-ups such as Ameritrade and E*Trade.