How do you feel about IB's new IPO?

I'm no economist, but the prospectus shows that about 5% of this privately held company is go public in a 200M share offering. The shares are "expected" to sell for $23 - $27. They hope to raise abount $500,000,000. Now that seems to be a lot for 5% of a rather small enterprise. That would valuate the market cap for IB at 100 billion dollars. If fact, to my untrained eye, it seems like a scam or epic proportions.

So this concerns me as a customer of IB, since I have a lot of money under their broker's umbrella. If this is a "questionable" action by a supposedly reputable broker, what does it mean?

Anyone have any thoughts about this, or did I completely misread the prospectus???

 

That would be a 10 billion dollar market cap.....

 

A typo , thanks.
Point still applies, only 300 employees.

 

I would like to participate in this IPO, but the numbers need to look reasonable. So, what is a reasonable price to pay? IB's growth rate has been outstanding.

 

Sell while the selling's good.
That's what they do, you know.

 

"only 300 employees."

That many?

 

532 employees (IPO prospectus p.118).

The 2006 net income of IBG LLC (as defined in the prospectus) is $734.2 million.

Valuation is in the eye of the beholder. Nonetheless, it's sensible to at least study the basic facts and numbers before forming any "opinion."

Have you read IB's prospectus (or, in the past, any other prospectus, for that matter), yucca_mtn?

 

Valuation is in the eyes of the market. But as a customer, I consider the IPO a positive for the following reasons:

1. Increased compliance due to SarbOx

2. Beats being sold to an entity with a different focus when the insiders need liqudity. I wouldn't mind joining with a prime broker but would hate to see an ETrade. (BTW, by many measures, IB is larger than ETrade & TDAmeritrade, though not larger than Charles Schwab).

 

You clearly have an investor hat firmly affixed to your scalp, rayl.

To paraphrase Benjamin Graham, in the long run the stock market is a weighing machine. In the short run, it is a voting machine.

Voting is of course not the same as valuing.

 

IB IPO is going for a 10B market cap.

How does that compare to REFCO IPO a few years back ... 2.5B market cap?

http://edgar.sec.gov/Archives/edgar/data/1321746/000104746905021309/a2162155z424b1.htm