Knight Trading Group
While management was slightly disappointed in our third quarter results, we remain confident in
our long-term business model. We believe that our model has shown the flexibility to grow
profitability and demonstrate its competitive advantage under changing market conditions. In
addition, we have successfully diversified our product offerings and client base. We are confident
that our client focus, superior technology and trading methodologies will allow Knight to continue
to deliver superior returns to shareholders.
Hambrecht & Quist
In our opinion, Knight remains an attractive takeover target for a large
institution looking to enter the market making business or bolster existing
operations. We do not believe the current quarter hiccup will change the
strategic outlook for any potential suitors of Knight.
Merrill Lynch
We believe NITE remains attractive in the long term based on its leading Nasdaq/OTC
market share and its scarcity value as the last remaining large independent market maker.
Robertson Stephens
We maintain our positive view of Knight's business model. We believe the company will continue to adjust
its trading strategies and algorithms in response to a changing trading environment and anticipate that
profit margins will return to more normal levels going forward. In our view, an increased focus on
institutional trading and international expansion should bolster results by the second half of 2001.
Salomon Smith Barney
We continue to view NITE as a tech-savvy leader in its sector, with substantial growth opportunities, and
earning attractive returns on capital. Even given our estimate reductions, we find NITE shares attractively
valued (even before Wednesday's drop, the shares would still have only been trading at a reasonable 13x our
lowered '01 EPS estimate of $2.60). In our view, the machine is not broken. We look at this shortfall as being
(largely) indicative of market conditions existing in a given quarter, and investors owning the shares have
to be willing to live with the volatility of those conditions. We believe long-term investors should view
the current drop in share price as a buying opportunity and, thus, maintain our Buy (1H) rating.
WR Hambrecht + Co
We reiterate our Buy rating on the stock. We are enthusiastic about Knight Trading Group. The
Company's dominant market position, world-class trading platform, portable business model, and
significant growth opportunities uniquely position it to capitalize on the changing dynamics of the
global trading community. We view today's weakness from near-term performance issues as a
tremendous buying opportunity for long-term investors.
NITE_Super_Long
Transcript from NITE_Super_Long's visit to Knight headquarters.