Telerate

Telerate was a pioneering firm in real-time financial market information founded by Neil Hirsh, backed by money from his father originally and then later by Bernie Cantor of Cantor Fitzgerald. Telerate was sold in 2005 to Reuters.
Telerate had a primary focus on money markets, fixed income, foreign exchange and over-the-counter derivatives for a global clientele. 
== History ==
Neil Hirsh was a 21-year-old college dropout working in a Merrill Lynch brokerage office as a clerk who became fascinated with electronic stock quote monitors. Hirsch figured out there were other areas of the financial markets that did not have electronic real-time quotes and he founded Telerate in 1969t to do just that. He started with the commercial paper market.
Telerate signed up a dozen or so customers for the commercial paper price quotes, but was running out of money. In 1971, Hirsh was approached by Bernie Cantor of Cantor Ftizgerald, which in 1972 ended up buying 25 percent of Telerate in return for $500,000 in debt. 
As a result of the relationship with Cantor, Telerate was able to offer prices of other financial instruments, including Treasury securities and information on when trade occurred. This was very valuable information that other competitors of Cantors did not want to distribute, which gave Cantor and Telerate a monopoly position for this valuable information. As a result, Telerate grew dramatically in the 1970s, which also was at the same time U.S. Treasury Bond futures were being introduced at the Chicago Board of Trade and huge amounts of debt were being issued by the U.S. government.
As a result of the success of the Telerate deal, Cantor increased their ownership stake in the firm to 70% over time. 
To expand overseas in 1977, Telerate entered into a deal with Dow Jones and AP to bring prices to Europe, Asia and Latin America. In 1981, as Telerate began to see results from its overseas expansion, Cantor sold its majority share in Telerate to a British investment group named Exco International.
Two years later, Telerate was listed on the New York Stock Exchange and Exco International's stake was diluted down to 49 percent and Neil Hirsh's stake was worth $70 million.
Telerate expanded its service to include other financial quotes, including fixed income, foreign exchange and metals prices. 
Just three months after listing its shares, Telerate updated its deal with AP and Dow Jones into a new structure where Telerate owned 49.9 and AP and Dow Jones owned 25.05 respectfully. Then Exco International upped its stake in Telerate to 51.5 percent. Telerate was growing rapidly, which encourage Exco's increased investment. 
Competition started showing up for Telerate in 1984 when Reuters tried to make its offering more valuable. Telerate responded by offering Telerate II, which was software which ran on an IBN computer and would allow traders to manipulate the data. Telerate also offered a handheld device that would receive quote via radio wave. 
Despite these moves, Telerate's growth started to falter. One factor was the break up of the phone company AT&T in the 1980s and the backlog of customers trying to get phone lines to connect to Telerate. 
In 1985, Telerate's foreign markets business partner Dow Jones bought a 32 percent stake in the company for $285 million. In 1986, Telerate bought the shares in the joint venture with Dow Jones and AP it did now already own. Then Dow Jones bought more of Telerate for $416 million and upped its stake to 56 percent of the company.
Telerate a month later announced a deal with AT&T that allowed it to take on Reuters for foreign currency trading. In 1987, Dow Jones increased its stake in Telerate to 67 percent. 
The firm also started work on a system called Matrix, which would leverage personal computers and the data from Telerate. However, sales were a disappointment and the savings and loan scandal reduced the potential number of clients for the firm's services.
In 1989, Dow Jones worked to complete its acquisition of Telerate, which it eventually did after spending a total of $1.6 billion to buy the firm. Dow Jones also bought out AT&Ts interest in the foreign exchange trading deal for $22 million. 
A group of competitors of Cantor Fitzgeralds announced they were going to make publicly available price quotes on government securities, something only Cantor had done before. This essentially ended Cantor's and Telerate's monopoly on this data. Telerate negotiated a deal with these firms to publish their quote as well as Cantor's.
In 1990, the U.S. government issued a report calling for greater access to government securities price data. In response, a group of 40 primary dealers, and five inter-dealer brokers began a service called GOVPX that disseminated real-time price information on trading of government securities.
In 1992, Dow Jones restructured its on-line information services and formed Dow Jones Telerate, Inc. 
However, a new entrant into the market would disrupt the business of both Dow Jones Telerate and Reuters by the name of Bloomberg. Dow Jones eventually sold the Telerate business to Bridge Information Services, which was the fourth largest player in financial data and news. Telerate was sold to Bridge, which was formed by private equity interests that had acquired Knight Ridder Financial News, for $510 million.
Bridge would go bankrupt in 2001 and Telerate was sold to Moneyline Network for $10 million and it was renamed Moneyline Telerate. 
Moneyline did not have much success with the business and by 2005 it was no longer publicly traded. The firm was owned by private equity interests associated with JP Morgan, who in June of 2005 sold the business to Reuters for $175 million. The Telerate business was absorbed into the existing Reuters offerings, ending the Telerate brand.
== Products and Services ==
Telerate offered real-time government securities quotes, foreign exchange, fixed income and metal price quotes. 
== Key People ==
*Neil Hirsh
*Bernie Cantor
== References ==