Instinet's longstanding president and chief executive officer, Doug Atkin, resigned yesterday following a special board meeting. The development is the latest twist in a troubled period for the electronic trading business, which recently warned investors to expect a first ever quarterly loss.
An announcement that Atkin had resigned followed shortly after an Instinet board meeting held in New York during Tuesday April 9th. The resignation was described as a joint decision. Instinet's official announcement refers to Atkin leaving 'to pursue other interests'.
Accompanying Atkin out of the boardroom door is Kenneth Marshall, chief operating officer. Marshall has taken this opportunity to retire but apparently remains available to the board as a 'special consultant' through to the end of 2002.
A sceptic might consider that the choice of words used in the Instinet announcement represents only a careful cushioning of what must be interpreted as a dramatic management clearout.
Instinet has experienced considerable pressure from new trading and pricing programs introduced by Nasdaq and from other electronic trading platforms such as Island ECN. The company's post-IPO stock performance has also been poor. Instinet's stock has lost over half its value since an IPO at $14.50 in May 2001.
At the end of March, the company initiated a further $120 million of operating cost cuts and warned that it may incur a net operating loss in the first quarter of 2002.
Stepping into Atkins' shoes is Mark Nienstedt, previously chief financial officer. Nienstadt now becomes president and chief executive officer. Additionally, Jean-Marc Bouhelier, previously executive vice president in charge of Instinet's US institutional and professional business, steps up to become chief operating officer.
All eyes will now be upon Instinet's Q1 2002 earnings statement due to be made on April 18. With little joy from recent company announcements shareholders - not least of which is Reuters itself - will be watching with interest to see both the figures, and to review the new CEO's performance, in what is likely to be a challenging conference call to the investment analyst community.
The abrupt departure is a sad end for Atkin who had been at Instinet since 1984 and had been the main architect and visionary in the development of the business from a small organisation, to a global player in the financial markets.