Interactive Brokers April 14, 2007 Dear Friends of Interactive Brokers: After 30 years of building our closely held company, we are ready for the next phase of our development. We believe that a public offering of our shares will provide us with greater name recognition and accelerate our growth. Accordingly, we are now launching the Initial Public Offering of 20 million shares of Interactive Brokers Group, Inc. ("IBKR"), and we expect the public offering price to be between $23 and $27 per share. Throughout our history, we have dedicated ourselves to building technology to provide liquidity and direct market access for our customers at very low costs. It is in this spirit that we are offering our shares in a Dutch auction through WR Hambrecht + Co's Open IPOTM system. IB Account Holders can participate in the IPO through our fully electronic IBIPO Dutch Auction System, or along with others may buy shares in the IPO through the participating broker of their choice. IB customers will find instructions on how to enter and cancel bids in the IBIPO Auction System at www.interactivebrokers.com/IBIPO. The IBIPO Auction System may be launched in Account Management under the Trading Access/IBIPO Auction tab. For the latest information on the IBKR IPO, including updates on the list of participating brokers, offering dates and an electronic copy of the prospectus you may visit our dedicated website IPO.Interactivebrokers.com. An IBIPO auction is typically open for bids for one to two weeks prior to the closing date of the offering. Once the bidding concludes, WR Hambrecht + Co will assemble the bids and, working from highest to lowest, it will identify the first bid price that will sell all the offering's shares. This is the "clearing price" and will be the maximum price at which the issuing company will offer its shares. The issuing company and placement agents will then decide the price at which the issuing company will offer the shares, taking a number of economic and business factors into account in addition to the "clearing price." As always we greatly value your business and look forward to continuing to serve you with our premier technology and low trading costs. Sincerely,
My question is when will IB have short shares available so I can start shorting it. There is going to be the usual hype about this IPO and it will probably be oversubscribed. There will be big crowds waving banners on the first day as usual. I remember the NMX IPO with the big crowds around the booth at the NYSE trying to get shares. There were prices as high as 150 on that first day. I soon learned, though, that the big crowd around the booth were really trying to find a way to short it and that they did. From 150 to 119 in a few weeks and still only at 130 today. I always think of what the bald man would have done in such an instance. He would have built up the hype and let it get to the stratosphere and then he would have shorted on the way down.
Page 60, on Timber Hill's MM business: "Our strategy is to calculate quotes at which supply and demand for a particular security are likely to be in balance a few seconds ahead of the market and execute small trades at tiny but favorable differentials. Our quotes are based on our proprietary model rather than customer order flow, and we believe that this approach provides us with a competitive advantage. As a matter of practice, we will generally not take portfolio positions in either the broad market or the financial instruments of specific issuers in anticipation that prices will either rise or fall. Our entire portfolio is evaluated each second and continuously rebalanced throughout the trading day, thus minimizing the risk of our portfolio at all times. This real-time rebalancing of our portfolio, together with our real-time proprietary risk management system, enables us to curtail risk and to be profitable in both up-market and down-market scenarios."
I learned years ago that I should short a stock a few days aftere it goes public, if the shares are available. Most have their exuberant rally on open, but a few days later, reality sets in. I even saw people doing this during the crazy "can't lose" euphoria of the tech boom. And then there was Google.
With all the rant and anti-sentiment, you guys are still using IB, aren't you ? A testament to their good service, good fills, and broad array of products. I think IBKR is a good long-term bet.
It's going to be interesting. He's doing the Dutch Auction thru Hambrecht ala Byrne and OSTK. Wall St. didn't do that. He is the guy that put the squeeze on spreads, and cost the Street a lot of money, all Citron at Vonage, and Soes. What will Wall St. do? Will they try to bury him? We'll see. Great theater.
And if you read the Prospectus (F-19) you'll see that they have the option to buy about 25% of Hambrecht and get two seats on Hambrecht's Board. Jack
agree with you...I think IB could be a long term hold. even a short term trader needs a few long holders has part has is asset allocation ..and I think IB would make a great candidate