Seven Wall Street banks are biting on WisdomTree's [profile] latest secondary offering, to the tune of almost $11 million. Yet it's not all good news for chairman Michael Steinhardt.

Today the New York City-based ETF provider and fundamental indexer revealed that the offering's underwriters � led by Bank of America Merrill Lynch, Barclays, Citigroup, Morgan Stanley and Goldman Sachs, with Piper Jaffray and Sterne Agee as well � will exercise their option to buy 1,795,630 shares. The previously revealed price of the offering is $6.10 per share, putting the value of the underwriters' exercised option at more than $10.95 million. The news is the latest wrinkle on WisdomTree's IPO-alternative path.

After starting life under a different brand, Index Development Partners, WisdomTree rebranded in 2005. It conducted a reserve merger to go public, commonly used to avoid the expense and lag of an initial public offering, by buying a publicly-traded shell company. After trading on the Pink Sheets under the ticker WSDT, in July 2011 WisdomTree moved up to the big leagues, switching to the WETF ticker and listing on the Nasdaq.

The reverse merger and the move to the Nasdaq transformed WisdomTree into a publicly-traded company with liquid shares and a high valuation � as of market close today, WETF traded at $6.33 per share, for a market cap of $791.77 million and a price-to-earnings ratio of 130.97. Put another way, with about $17.6 billion in ETF assets under management, Mister Market currently values WisdomTree at 4.499 percent of AUM. Over the summer Goldman analysts estimated the chance of "M&A activity" with WisdomTree at between 30 and 50 percent.

Yet, unlike a traditional initial public offering, the reverse merger separated the "going public" part of an IPO from the "raising capital for the investors and company" part. So, WisdomTree prepped one secondary offering, and then another. In February the company and its shareholders sold 16,516,587 shares for $92.69 million. WisdomTree CEO Jonathan Steinberg and chairman Steinhard both sold shares in the offering.

Then in October, WisdomTree filed for another secondary offering, nearly twice the size of the first. Steinhardt and RRE Ventures, a venture capital firm that bought into WisdomTree more than seven years ago, offered up 26 million shares, with an additional 3,868,185 shares available for the underwriters' option. In November the underwriters priced the offering at $6.10 per share [8-K filing] [prospectus]. That values the offering at $158.6 million, not including the underwriters' option.

Yet the news is not all good for Steinhardt and RRE. WisdomTree's share price fell 10 percent since the offering was announced in October, to $6.33. And while the underwriters are buying up an additional 1,795,630 shares, they could've bought 2,072,555 more.

Company Press Release
WisdomTree Announces Underwriters Exercise Option to Purchase Additional Securities in Connection With Previously Announced Secondary Offering

NEW YORK, Dec. 19, 2012 -- WisdomTree Investments, Inc. (Nasdaq:WETF), an exchange-traded fund sponsor and asset manager, today announced that the underwriters for the public offering of 26,000,000 shares of WisdomTree common stock by certain of its existing stockholders exercised their option to purchase an additional 1,795,630 shares of its common stock. WisdomTree will not receive any proceeds from the offering, and is not issuing any new shares; therefore, its total number of shares outstanding will not change as a result of the offering.

BofA Merrill Lynch, Barclays, Citigroup, Morgan Stanley and Goldman, Sachs & Co. are acting as book-running managers and Piper Jaffray and Sterne Agee are acting as co-managers for the offering.

The offering was made pursuant to our effective registration statement on Form S-3 (Registration Statement No. 333-184505) previously filed with the Securities and Exchange Commission (SEC) and a prospectus supplement thereunder. A copy of the registration statement and prospectus supplement may be obtained from: BofA Merrill Lynch, Attn: Prospectus Department, 222 Broadway, New York, NY 10038, Email: dg.prospectus_requests@baml.com; Barclays, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Email: Barclaysprospectus@broadridge.com, Phone: (888) 603-5847; and Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Phone: (800) 831-9146.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

About WisdomTree

WisdomTree Investments, Inc. is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 46 ETFs across Equities, Currency Income, Fixed Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and promotes the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $17.6 billion in ETF assets under management.

WisdomTree� is the marketing name for WisdomTree Investments, Inc., and its wholly owned subsidiaries WisdomTree Asset Management, Inc. and WisdomTree Retirement Services, Inc.�WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust. WisdomTree Retirement Services, Inc. supports the use of the WisdomTree ETFs in retirement plans by financial professionals.

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