Last week saw the disaster of epic proportion that was BATS debut into the market with their IPO (seen here). As a result, BATS retracted their offering with the intentions of regrouping. However, this incident left a whole host of skeptics who would never trust an exchange operator that couldn’t handle their own IPO. No doubt, BATS’ valuation will be adjusted when they are ready to bring the IPO back to the table.. But will this be a discount opportunity on essentially the same stock? According to founder Dave Cummings (who no longer works for BATS but is still and investor) the system isn’t broke:
“This was a freak one-time event,” wrote Cummings, also the outspoken chairman of Tradebot Systems, an electronic trading firm that like BATS is based in Kansas City, MO.
“BATS management should develop a plan to go public in the second quarter, if possible,” he said. “This might seem tough, but I believe it is the only way to move past the issue.”
Cummings, who remains a BATS investor after stepping down as its CEO in 2007, said the deal would need to be re-priced. But he defended BATS’ technological record and argued that the “botched IPO” does not have much long-term impact on earnings because the exchange has “solid fundamentals.”
Considering how long BATS has been in operation, it’s hard to believe that their “IPO failure” will be a reoccurring problem. It might be one rumor worth buying..