Telerate
| Company type | Private (formerly public) |
|---|---|
| Industry | Financial data services |
| Founded | 1969 |
| Founder | Neil Hirsch |
| Fate | Acquired by Reuters in 2005; brand discontinued |
| Headquarters | United States |
| Products | Real-time market data on commercial paper, bonds, corporate debt, foreign exchange, interest rates, commodities |
| Parent | Dow Jones & Company (1990–1998), Bridge Information Systems (1998–2001), MoneyLine Network (2001–2005), Reuters (2005–) |
Telerate was an American firm specializing in delivering financial data to market participants, with a focus on pricing for commercial paper and bonds. It was a trailblazer in the 1970s for distributing electronic real-time market information, expanding the technology originally designed for live stock price updates to include corporate debt, foreign exchange, interest rates, and commodities.
Established by entrepreneur Neil Hirsch, Telerate emerged as a leading provider of market data throughout the 1970s and 1980s. In 1990, it was acquired by Dow Jones & Company, which sought to challenge the dominant player Reuters. Nevertheless, clashes in corporate culture and a loss of strategic direction caused Dow Jones to deprioritize Telerate. The company changed hands several times afterward, undergoing rebranding as Bridge Telerate and subsequently Moneyline Telerate.
In 2005, Reuters purchased the remaining assets of Telerate, incorporating them into its market data operations. This acquisition marked the end of Telerate’s independent existence but led to customer attrition, as many clients had selected Telerate as an alternative to Reuters and were dissatisfied with new contractual conditions.
Early years
Telerate was launched in 1969 by 21-year-old Neil Hirsch, backed by $2 million in venture capital. Early investors included Bernie Cantor, the proprietor of government securities brokerage Cantor Fitzgerald. The company’s innovative technology coupled with competitive pricing drove rapid expansion. However, Hirsch’s extravagant lifestyle reportedly generated internal friction.
Cantor Fitzgerald controversially utilized Telerate to publicly display its trading prices—the first brokerage to do so—provoking opposition from major Wall Street firms such as Merrill Lynch, Bankers Trust, and Chemical Bank.
By 1971, Telerate was preparing for an initial public offering but opted instead to sell a 25% ownership share to Cantor Fitzgerald in 1972. By the mid-1970s, it dominated the U.S. Treasury bond pricing market. In 1977, after generating $1 million in profits, Cantor Fitzgerald increased its ownership to 70%, and Telerate established the AP-Dow Jones joint venture alongside Associated Press and Dow Jones & Company.
Confronted with intensifying international competition from Reuters by 1981, Cantor Fitzgerald sold an 89% stake to British investment firm Exco International for $75 million, while management retained the remainder. That year, Telerate reported net earnings of $13.6 million with roughly 10,500 terminals installed worldwide—each terminal typically costing customers between $540 and $700 monthly.
Association with Dow Jones
Following its IPO in 1983, Telerate created a subsidiary named AP-Dow Jones Telerate Co. to manage international operations, with substantial ownership stakes held by Dow Jones and Associated Press. As competition from Reuters intensified, Telerate’s stock price declined in 1984. In response, Dow Jones and Associated Press collaborated on integrated services designed to compete with Reuters, igniting a technological rivalry between the companies.
Dow Jones purchased a 32% stake in Telerate in 1985 for $285 million—valuing the company at $800 million—and subsequently raised its shareholding to 56% in 1987 through a $415 million investment, increasing further to 67% in 1988. To counter Reuters' Advanced Reuters Terminal, Telerate launched its Matrix system. Despite these efforts, both companies struggled to fully satisfy traders’ evolving requirements, enabling Bloomberg to gain market share with its Bloomberg terminal. Over time, Telerate became increasingly marginalized within Dow Jones and its services were eventually merged into Dow Jones Newswire.
Conclusion of the company
In 1998, Bridge Information Systems, ranked as the fourth-largest provider of market information after Reuters, Dow Jones, and Bloomberg, acquired the struggling Telerate division from Dow Jones for $510 million. Dow Jones absorbed losses due to fierce competition and Telerate’s shortcomings in offering sophisticated historical pricing and analytical capabilities. Despite interest from Cantor Fitzgerald, Bridge rebranded the acquisition as Bridge Telerate.
After Bridge filed for bankruptcy, Bridge Telerate was sold in 2001 to MoneyLine Network for $10 million. During the transition, MoneyLine secured data service agreements with Reuters and network support contracts with SAVVIS Communications, renaming the business MoneyLine Telerate. However, conflicts with Reuters in 2003 jeopardized the continuity of data feeds.
By 2005, MoneyLine Telerate, which had become privately held with majority ownership by One Equity Partners (the venture capital branch of JPMorgan Chase), was sold to Reuters for around $175 million. This transaction marked the end of the Telerate brand as it was integrated into Reuters’ market data operations.