Hedge funds circle eSpeed

Hedge funds circle eSpeed

Electronic bond trading network eSpeed is coming under renewed pressure for a change in ownership following the acquisition of a 6.4% stake in the company by hedge fund WC Capital Management.

An SEC statement filed by the fund details a letter sent to eSpeed CEO and president Howard Lutnick setting out a range of strategic alternatives for the firm. These include the sale of the company, the conversion of Class B shares to Class A shares, the return of capital to shareholders, and a formal split from Cantor Fitzgerald and BCG Partners.

The letter, signed by WC's sole owner Aaron Braun, states: "We believe eSpeed is a valuable business enterprise that is significantly undervalued based on its current equity valuation. Our analysis has led us to believe that the range of the company's theoretical valuation could be considerably higher than the current share price which could result in a value 28% to 70% greater ($12 to $16 per share) than the current valuation of $9.40 per share."

The latest set of demands mirror those already made by Investment fund Chapman Capital, which earlier this month disclosed a 9.3% stake in eSpeed.

ESpeed CEO Lutnick has yet to issue a public rebuttal to the calls.

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