Mostly… fixed income and cross product eTrading

August 14, 2007

Goldman Invests in DirectEdge

Filed under: etrading — holky @ 2:03 pm

The Direct Edge ECN just took a step closer to independence by bringing in Goldman Sachs in as a co-owner, after announcing in Jul that Citadel Investment Group’s derivatives unit was its first outside, minority partner.



  1. Goldman invests in everything. Way back it even took a nice spot in the ARCA lineup of investors. It is important to keep in mind, GS “direct investments” are just like any other “trading desk” at GS. They view these as in and out transactions. Get in the cheapest. Pump up to anyone they can, sell them off as soon as possible. Now buying a selling a company takes longer than buying and selling a stock, but the same GS formula applies. Research it, buy it, spread the research to others, pump it up a bit, attract buyers, sell it at higher price. Capitalism. It is only recently (yes even before the credit crisis-but with its shadow looming) that we are seeing some very hasty moves to market by GS for their “direct investments”.

    Direct Edge is just another… They probably organized the deal, KA-CHING$ fees, and then will benefit from ownership $$ and will then be on one or both sides of a sale, IPO, or insertion into another one of their direct investments. KA CHING KA CHING.

    Comment by lacidar — August 17, 2007 @ 12:08 pm

  2. I should have added to the above.

    The key to all these GS “investments” trading technology properties etc is to say to oneself, if GS (who we follow do to their outstanding success at making money in the last 5 years) if GS had nothing to do with this investment, what would one’s interest be in the deal, project, consortium, etc or what would its real fiscal value be in $$$ or even in value as a working business enterprise providing goods and services to an end customer. If GS were absent from the scene would those equations be even close. Some thoughts.

    Comment by lacidar — August 17, 2007 @ 12:14 pm

  3. Lacidar, I must say I struggle to workout exactly what you are trying to say re: GS. Perhaps that is your plan, dunno.

    Are you saying that GS enter into these projects in order to use their reputation to get more people to invest and then selling out at a higher price?

    If so, what is wrong with that?

    Comment by waratah — August 20, 2007 @ 3:28 pm

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