The equity market has found itself relegated to bit-part player in the technology stakes in the last 12 months, a far cry from 1999, when the internet revolution seemed set to transform share trading. Throughout 2000 first the credit markets and then the foreign exchange markets began to exploit the internet more. And then there was the March-April Nasdaq crash, followed by another stock price crash which also hit the New York Stock Exchange. Equities, for three years the big money-spinner in many investors' portfolios, as well as the breeding ground for countless new business proposals, suddenly wasn't so hot. Online brokers experienced a downturn in business, and full-service brokers - those staffed by human beings offering advice - are back in fashion. Analysts are now predicting that 2001 will be the year of online retail broker consolidation in the US.
Wit Capital is the bellwether for this part of the industry. It began in the mid-1990s as an online investment bank looking to empower retail investors, but underwent a two-stage transformation, starting at the end of 1999 when it bought institutional sales research and trading boutique Soundview (and changed its name to Wit Soundview).