By Dhirendra Tripathi
Investing.com – Virtu Financial (NASDAQ:VIRT) stock was trading 5% lower in Wednesday’s premarket as the high-frequency trader's revenue fell and its second-quarter earnings came in below expectations.
Revenue decreased 39% to $549 million, driven primarily by lower trading volumes in U.S. equities, compared to $905.9 million for the second quarter in 2020, when volumes were significantly elevated by the COVID-19 pandemic.
The June quarter of 2020 was one of the most bullish times for equities when the markets just took off after a heavy selloff in February-March as the world came to grips with the pandemic’s onslaught. All market makers benefited. However, trading volumes appear to have cooled since the more panic-stricken first wave of the pandemic.
Adjusted earnings per share was 63 cents, compared to $1.73 for the same period in 2020. This was lower than the 77 cents analysts expected it to get.
As of June 30, Virtu had $915.3 million in cash and equivalents, a deterioration from the $1.02 billion it held three months earlier. As a market maker, the company commits capital by buying securities from, or selling securities to dealers.