I initially took a position a couple of years ago, hoping that their superior technology would get bought up a larger competitor. I was willing to wait a couple of years. I also remember how restrictive their IPO was. It's the reason why the share hasn't really moved and why they won't get taken over. I forget the details but the way the IPO was structured, TP and his crew, have much more control than a typical company that goes public.
ameritrade bought tos. it has actually become better for me as a customer. more functions got added and event he great tos platform got improved. i really hope that a smart company would buy ib and not one of the bankrupt and stupid companies. ib would be a bone for schwab. they own already oec and ox. if ameritrade or schwab buys ib i will stay. otherwise i bet many customers will leave in droves. goldman is a smart company. they play in a completely different league and they do not even think about ib
'if ameritrade or schwab buys ib i will stay. otherwise i bet many customers will leave in droves." why?
Ten years ago, IB had a superior platform. These days I think most of the internal operations of the bigger banks - and even some smaller brokers - have caught up to the technology. IB was literally hours away from buying MF Global. http://finance.fortune.cnn.com/2012/06/04/the-last-days-of-mf-global/ freedinner posted this link in another thread and it's a great read. TP was putting up 800mm of his own money to take MF Global, but when they discovered that the books were in serious disarray, he was smart enough to step away. It shows that he is looking for opportunities - at least on the acquisition side. I think you have to look at why IB would be attractive to a buyer. From what I understand, the customer base isn't that great. TP wanted to buy MFG to get their seg account base. So why hasn't IB grown much more organically with their great technology and low prices? I think that's what these potential suitors have to look at. When I became a customer many years ago, I thought IB would blow everyone away. Customer service is anywhere from good to comically inept, with the majority of interactions favoring the latter - and I'm on the pro side. The auto-liquidate does a great job of protecting IB and the customer (often from themselves), however there are still notable issues with wrongful auto liquidations of accounts that have been misvalued during fast or thin markets. IB's general response - "too bad". You can't grow the business when you keep doing that to the people that are leaving significant funds in your custody and generating tons of commission. I don't see a great reason to be a buyer of IB. What would the buyer be looking to gain from the deal?
Tom Peterffy is what makes IB a best of class brokerage company. If IB was bought out and managed buy the buyer, IB would no longer be a best of class brokerage company.
Being alleged "best of class"... And making money for your shareholders... Need not have any correlation. TP has diabolically structured the public incarnation of IB... As 100% win for TP... and 0% win for the public.
I agree that IB is more likely an acquirer than a target at this point._ BTW their organic growth is quite impressive. They have grown number of accounts, equity per account etc. steadily in the last few years; profit from brokerage in 2011 was double 2007 and almost 4 times that from 2006. And that's a period that encompasses the financial crisis and steady decline in retail investor participation in the markets. The main reason why they haven't grown even faster is that they so far are choosing to restrict themselves to a small niche in the market: Serious traders and investors like us. They are so far shunning the huge business below and above that niche._ More casual investors feel overburdened by IB's complexity and time-consuming sign up process. IB would do well in my opinion designing a second "IB light, by IB" brand, that offers a simple website frontend with just limit and market smart orders for the US market, and put SCHW and AMTD etc. under pressure with low prices. They are also slow on the high end of the market. For example, I don't understand why IB is not aggressively promoting their genius solution for trading non-USD denominated assets to public pension funds etc. that have been raped by BNY and STT on FX conversions for their international trading.