Liquidnet files for $500 million IPO

NEW YORK (Reuters) - Liquidnet Holdings Inc, an electronic trading venue that has eaten away at the market share of the established stock exchanges and squeezed their profit margins, has filed to go public and sell up to $500 million of its common shares.

The filing, made late on Tuesday, did not disclose the number of shares to be sold or the expected price but Liquidnet is targeting the fourth quarter for the IPO.

The company will not receive the proceeds of the sale of its common stock by selling stockholders, who include the company's senior management and board of directors.

The New York-based company, founded in 1999, is the dominant electronic marketplace serving buy-side trading firms in the United States. It lets the firms anonymously trade large blocks of stock without traditional brokers and exchanges. It is among the 10 largest brokers in the country.

In 2007, the company averaged a trading volume of 63.2 million shares per day, up 32 percent from a year earlier, according to the filing.

Liquidnet's announcement comes at a time when the IPO market is experiencing its worst slowdown in years. The second quarter, the slowest in five years, saw only 14 IPOs in the United States. The small number of deals can put downward pressure on IPO prices, one analyst said.

"The filing today may end up being tainted in the perspective of investors because of the moribund IPO market," said David Menlow, president of IPOfinancial.com.

Still, he said, a well run, growing company can price well even in a weak market.

"It is a difficult market, however, we are confident that we, along with our underwriters, will have a successful IPO," the company told Reuters in an e-mail message.