(Recasts; adds details)
By Jonathan Spicer
NEW YORK, March 25 (Reuters) - U.S. exchange operator BATS
Global Markets withdrew its initial public offering mid-Friday
after it became clear investor confidence had eroded, its chief
executive said on Sunday, adding there are no plans for an IPO
in the foreseeable future.
BATS' own stock was to be its first listing, but the IPO
ended up a disaster after a software bug briefly sent the price
of the shares down from $16 to less than a penny before trading
was halted. Later in the day, BATS took the extremely rare step
of withdrawing the IPO altogether.
"Basically because we're an exchange listing our own stock
and we're having trouble operating the auction process and
continuous trading as an exchange, it became clear to us that
investor confidence had eroded," Joe Ratterman said in an
"We had a technical blip. It's completely regrettable and
very painful," he added. "We put other investors and the
market's stability first, and our own needs second. So I think
people will give us a shot to re-earn that trust."
BATS, the third-largest U.S. stock exchange, is owned by
many of the world's largest banks and trading firms. In the last
decade, it has taken on the New York Stock Exchange and Nasdaq
in the trading of stocks and recently, also wanted to challenge
them in listings.
Ratterman's explanation and mea culpa came hours after Dave
Cummings, the exchange's founder in 2005 and current board
director, recommended that it push forward with the long-held
IPO plans in the second quarter.
When asked about the proposal, Ratterman, who took the reins
from Cummings in 2007, said only that BATS had no plans to go
public in the foreseeable future. He said the board would also
have to consider Cummings' other suggestion: that all bonuses at
BATS be suspended.
The decision to pull the IPO came after discussions with
underwriters and with a board committee, Ratterman said, adding
the IPO syndicate desk had heard from some concerned investors.
The U.S. Securities and Exchange Commission was alerted
within minutes of BATS' shares plunging, he said.
Ratterman added that he does not expect legal problems
because no BATS shares or money actually changed hands on
Friday. Because the auction trades were broken, "no investors
will be out," he said.
(Reporting by Jonathan Spicer, Editing by Gary Crosse)
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