The high-frequency trading firm Virtu Financial has decided to postpone its initial public offering by at least a week, amid a storm of negative attention over its industry’s business model, two people briefed on the matter said on Wednesday.
The company made the decision on Tuesday night, one of these people said. It now may wait until later this month to begin pitching its upcoming I.P.O. to prospective investors.
Since the release on Monday of “Flash Boys,†a new book by Michael Lewis, the high-frequency trading industry has been on the defensive. Mr. Lewis and the book’s subject, Brad Katsuyama, who runs an upstart trading platform, appeared on television several times in the last few days to declare that the stock market is rigged in favor of high-frequency traders, who use computer algorithms to buy and sell shares in milliseconds.
The stock of another trading company, KCG Holdings, fell 3.3 percent on Tuesday. KCG is the result of the merger between the Knight Capital Group and Getco. Shares of the Nasdaq OMX Group, which sells services to high-frequency traders, were down 3 percent, while shares of the IntercontinentalExchange Group, which owns the New York Stock Exchange, were off 2.4 percent.
Virtu was getting ready for its Wall Street debut when the book came out. In March, when the company first filed a prospectus for an I.P.O., Wall Street was stunned to learn that Virtu had lost money on just one day in nearly five years.
That near-perfect record did not go unnoticed by the New York attorney general, Eric T. Schneiderman, who is intensifying a broad investigation into the business of high-frequency trading. He is taking a hard look in particular at services the stock exchanges offer to high-speed traders.
In its I.P.O. filing, Virtu said that one regulator, the Commodity Futures Trading Commission, was looking into its “participation in certain incentive programs offered by exchanges or venues†during a period from 2011 to 2013. The company said it did not believe it ran afoul of laws or regulations.
Bloomberg News earlier reported on the I.P.O. delay.
