OptiMark Says It May Sell Trading Service

OptiMark Technologies, bleeding red ink, said it may sell the automated stock trading service it once promoted as a rival to the New York Stock Exchange.

OptiMark’s apparent failure, after four years of operation in which it couldn’t attract the mass of investors it needed, shows how new electronic trading systems can find it tough to supplant Wall Street’s entrenched trading venues.

In a filing with the Securities and Exchange Commission late Monday, OptiMark said, “Through efforts currently underway to consolidate, or possibly sell, the U.S. equities business, the company believes it can substantially reduce operating expenses.” Officials didn’t return phone calls.

OptiMark has lost $273 million in four years. Funds from Japan’s Softbank Corp. and other OptiMark backers amounted to $22.5 million at the end of June, enough to fund operations through mid-October, OptiMark estimated.

OptiMark was designed to help U.S. investors sell or buy big blocks of stock via a computer system that matched orders anonymously--so word of investors’ strategies couldn’t leak out and affect prices. It was launched initially with the Pacific Stock Exchange.

But the system faced two obstacles: It was criticized as overly complex to use, and it flew in the face of Wall Street tradition, whereby many money managers place orders with brokerages as repayment for investment research.

OptiMark now is seeking other uses for its technology worldwide. It has a pact with the Osaka Stock Exchange, and with the shipping industry as part of a chartering alliance called ShipDesk.