Tradeweb’s 50% Rally Sets Stage for Questions About Debt Market

(Bloomberg) -- Bond and derivative trading platform Tradeweb Markets Inc. may face fresh scrutiny about debt trading and fierce competition next week, when some Wall Street analysts are poised to roll out their first comments on a stock that’s gained more than 50 percent since its IPO in early April.

The main questions on analysts’ minds likely surround the electronification of debt trading, Bloomberg Intelligence banking and exchanges analyst Paul Gulberg said. They may be assessing how long robust growth rates can continue, and whether Tradeweb can make more inroads into credit trading. There’s also concern about whether brisk growth is attracting “powerful” competition, Gulberg added.

Tradeweb raised $1.1 billion in one of the largest U.S. initial public offerings this year. Shares have since risen by more than 50 percent above the IPO price.

Tradeweb’s 50% Rally Sets Stage for Questions About Debt Market

In its IPO filing, the company warned that competition has gotten tougher due to consolidation, resulting in “increasingly large and sophisticated competitors.” Examples included Intercontinental Exchange Inc.’s acquisitions of BondPoint, TMC Bonds and IDC, and CME Group’s NEX Group buy.

Tradeweb added that “Bloomberg and ICE have trading platforms that compete with ours and also have a data and analytics relationships with the vast majority of institutional, wholesale and retail market participants.”

A 25-day quiet period for analysts who underwrote the company’s entry to the public market expires on Monday. This quiet period only applies to IPO underwriters -- in this case, JPMorgan, Morgan Stanley, Goldman Sachs, Citi, Credit Suisse, Barclays, BofAML, Wells Fargo, UBS, Deutsche, Sandler O’Neill and Jefferies. Currently, Compass Point rates the stock neutral and Rosenblatt rates it buy, according to Bloomberg data.

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