ThinkEquity Closing Stock-Trading Unit as Volumes Decline

ThinkEquity LLC is closing its stock-trading business today amid a market slump and preparing to transfer its remaining investment-banking unit to another firm, Chief Executive Officer Greg Wright said.

ThinkEquity, which employs a total of about 100 people, is determining how many jobs will be cut, he said in a telephone interview. Wright said another firm, which he declined to identify, has offered to take over San Francisco-based ThinkEquity’s investment-banking business and hire some workers. Details may be announced as soon as tomorrow, he said.

ThinkEquity joins other firms closing or shrinking their stock-trading businesses as investors trade less and pay lower commissions. Nomura Holdings Inc., Japan’s biggest brokerage, cut as many as 30 jobs in its Americas equity division in September and New York-based Oscar Gruss & Son Inc. closed its merger-arbitrage unit last week. Average daily volume for U.S. equities was 6 billion shares in the third quarter, the lowest since at least 2008.

“It’s an impossibly tough business,” Wright said. “Spreads are compressing, of course, but volumes have collapsed. There aren’t enough commission dollars today for the number of market participants so there will be further consolidation.”

To contact the reporters on this story: Zeke Faux in New York at zfaux@bloomberg.net; Saijel Kishan in New York at skishan@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net