IB is a market maker, mostly in options. This is where the majority of their revenue comes from. The brokerage unit is secondary to this.
I just finished reading the prospectus... and it's a great read. IB is a breed of its own, and I think we can learn much from this prospectus even if not investing... From the prospectus, it is quite obvious the brokerage business is booming... and it is very likely it will continue to do so. As an IB customer myself, I can tell how much more it is than a typical online brokerage... it is like a self service prime brokerage and I have no doubt it will only gain market share in the future... What really worries me is it's market making business. 77% of revenue comes from Timber Hill... and it seems the margin in that business is shrinking due to tighter spread and competitors catching up in technology development... everytime we hear record profit from goldman sachs "prop trading" operation, it's market share lost to them... and they're creating all these dark pools these days, potentially keeping liquidity from leaking out of their own circles... And the whole thing looks too much like Thomas Petterfly wanting to cash out... dunno if it's his age or something else... If IB is a purely brokerage business, I would bet heavy in this stock... but now it's bundled with Timber Hill... although it's a money machine at the moment, it doesn't look too good in the future... especially there aren't much more markets to expand into now that they're already operating in 60 exchanges worldwide... hmm...
It's only natural that the spreads on options will tighten over time. I would think that this would have a huge impact. is there any chance that IB would spin off the brokerage business? i think a lot of people would have great interest investing in the brokerage portion. there's a lot of growth potential there.
I can't forget the day when Refco went public.... I hope they are not going public because they are short cash or because of some hidden debt no one can see at the moment...
don't worry... Thomas Petterfly and friends are still holding 95%... if short of cash, would let go larger chunk at IPO... looks like a longer term cash out process...
Big difference - they weren't regulated by the fed or sec. Refco is a case study in the difference between wall st & wacker.
...And wasn't ENRON.WCOM, Merrill and Smith barney part of wall street? Anyway...Good luck to Ib going public....YOU WILL REGRET IT!! private companies can do as they please.....watch what happens when you try to give out the same perks you've been dolling out for 30 years!
Yeah, I've noticed that remarkable restraint in perks that officers of public companies have been forced to comply with! LOL! OldTrader
HEAR YE HEAR YE ! Eventually, IB will be bought by one of the following: WR Hambrecht + Co HSBC Securities (USA) Inc. Fox-Pitt, Kelton Inc Sandler O'Neill + Partners, L. P. E*Trade Securities, LLC BI Investments, LLC Doft & Co., Inc. Fidelity Capital Markets Ferris, Baker Watts Incorporated LaSalle Street Securities, LLC LPL Financial Services Maxim Group LLC Robert W. Baird & Co. Incorporated Sharebuilder Securities Corporation Wedbush Morgan Securities, Inc. Wells Fargo Securities, LLC see: http://ipo.interactivebrokers.com/ You heard it HERE ! Tom Let's start searching for a more reliable and more customer friendly Broker like: see: http://www.successtrade.com