here is my previous post from 10/24 10-24-05 09:32 AM Some thoughts of my thoughts on the CBOT IPO. -Uses Euronext Liffe's LIFFECONNECT for matching, not its own system -In 2003, Exchange fees accounted for 75% of revenue ($285mm); 2004, only 54% of revenue ($204mm) -Uses CME's CME/CBOT Common Clearing Link for clearinghouse -Clearinghouse fees increased from $1.158mm in 2003 to $73.556mm in 2004. -Clearinghouse house costs increased from $972m in 2003 to $54.755mm in 2004. -82% of all contracts cleared are for Financial derivatives ⦠-CME is the largest US financial derivatives market 2005 first-half net income was $39mm; annualized we will assume $78mm for fiscal 2005 There is a float of 52mm shares and only 3.163mm have been offered to the public. *6.1% of float* EPS: $78mm/52mm = $1.5/share P/E 10/21: $126/$1.5 = 84 There is a lockup on the stock for 6/12/18 months 1/3 of shares free to trade every 6 months. Compared with CME: -IPO issued 13% of float, BOT only issued 6% of float so the rest of those shared will be coming in 6 months. -CME makes money for clearing BOT's trades -Euronext Liffe makes money for matching BOT's trades - CME largest US financial derivatives exchange Here is the kicker though, CME with all 34.37mm shares outstanding is only trading at a p/e of 44.