Bear Stearns writes off $225M for specialists

With floor traders at the New York Stock Exchange fast becoming obsolete, Bear Stearns Cos. Inc. said today that it would write down the value of its specialist business by $225 million, according to Crain's New York Business. Specialists are traders on the NYSE floor who manage auctions of stock. Many of them have seen the business evaporate since the NYSE unveiled a so-called hybrid market last year that gave customers the choice to trade through specialists or over computer networks. "The implementation of the NYSE hybrid system has dramatically reduced the opportunity of specialists to earn an appropriate return," said Bear Stearns' Chief Executive, James Cayne, in a statement. It isn't clear how much business has slipped at Bear's specialist unit, called Bear Wagner. But LaBranche & Co., the No. 1 specialist at the NYSE, last month reported a first-quarter net loss of $5.6 million, or 9 cents a share, on revenue of $122 million, compared with a profit of $112 million on $297 million of revenue in the year-earlier period. Earlier this year, Van der Moolen Holdings NV said it planned to slash its U.S. work force by about 30%, or 55 people.