Description
For David Whitcomb, an economics professor who barely broke even betting on horseraces, the front-page story in the Wall Street Journal was a triumph that defied his wildest fantasies. The headline on July 3, 2007, read "Citigroup to Buy Electronic Trader For $680 Million." The largest bank in the U.S., with operations in more than 100 countries, had agreed to buy the company he founded, Automated Trading Desk, for $102.6 million in cash and 11.17 million in Citi shares. Dave and his team of homegrown techies had hit the jackpot.
The sale came nearly 20 years after Dave first faxed his handwritten ideas for computerized trading to his former student and tutor in horserace prediction, Jim Hawkes. Two college kids, Jonathan Butler and then Steve Swanson, joined the team and from Jim's garage attic in Charleston, South Carolina, they developed the world's first programs to trade stocks using full automation. The shift from manual person-to-person transactions to computerized trading was bound to happen, but ATD was the trailblazer that beat New York's largest firms, eventually making 6% of all trades on the National Market System.
The story of ATD is marked by numerous failures, setbacks and near-death events that would cost the company, and Dave, many millions of dollars. But there were also stunning technological breakthroughs and boom years that fueled innovation. Today, automation powers more than 90% of the world's markets. From a stuffy attic 600 miles from Wall Street, Dave and his team helped move the financial world to a new era of electronic trading. This is the untold story of how it all happened.