IB as an investment

Discussion in 'Stocks' started by lwlee, Sep 20, 2011.

  1. lwlee


    I've held Interactive Brokers for 3 years, ranging in price from $14.50 to $21.50. It's been a dog. The original IPO structure was setup to favor the existing ownership but I always thought some other company would realize the superior technology at IB and make a bid for it. That hasn't happened and I'm pretty fed up and looking to dump.

    Anyone have an opinion? Still love their trading platform but up until now, the company's stock growth sucks. Would have been better off going with ICE or CME even with their volatility.
  2. If the management of IB would have some long term strategy - which it has NOT - it would have bought other brokerage companies that would pretty much fit into its business model.

    But obviously Mr. Peterffy has no interest in expanding further...

  3. zdreg


    your premise seems doubtful. you end up with a lot of customers either u don't want or they don't want you. their philosophy seems to be built a better mousetrap and the right people will come to you.
  4. hajimow


    100% agreed. They have kept the cost down by not sending any snail mail to the customer. Just imagine if they buy a brokerage that send snail email for everything. Then whta they should do? Have two busienss strategy? Baby they are growing and they are growing fast in trading business.
  5. newwurldmn


    I bet if the insiders didn't have most of the voting shares, Schwab, Etrade, TD, or someone else would have bought them. IB has the most sought after customers: they trade a lot and use a lot of margin. I remember in 2005 when BrownCo (owned by JPMorgan) was sold to Etrade people loved the transaction because BrownCo customers tended to not need a lot of hand holding, used a lot of margin and traded a lot of options. Per dollar of deposit Brownco customes paid like twice the industry average in fees. I bet IB is even higher.
  6. nitrene


    I agree with zdreg that keeping the current business makes more sense than trying to get more customers who don't really want to be a part of IB.

    I have IB and I love it. Its way better than any other broker I have tried.

    My question is if they have no need for expansion then WHY ARE THEY PUBLIC? There is no need to go public if you have no growth strategy unless there are VCs,PE,etc. trying to get out.
  7. zdreg


    one reason may be to have a guidepost to price options to executives.
  8. newwurldmn


    Maybe several of them wanted to buy yachts or bigger houses.
  9. jayre


    The setup seems that is made for the benefit of IBG LLC & TP, rather then IB shareholders. Read the IBKRvannual report & all the conflict of intrest disclosed there. This is not the usual poblic company.
    #10     Sep 21, 2011