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IBKR’s IPO Results
By Stock Charts | May 7, 2007
As many of you know, Interactive Brokers (IBKR) IPO’ed last week using the dutch auction method. Volume was heavy, with 23 million shares traded. However, I must say that the debut fell well short of my expectations. I was able to get 200 shares of IBKR at the price of $30.01 out of three 100 share bids. Shares opened at $33, and basically trended downward the entire day, closing only 4.30% higher than the IPO price. I expected a larger pop right off the bat, and after an hour of stagnant trading, I decided to drop my shares and was able to exit my position at $33.01, for an exact gain of 10%.
Interactive Brokers had previously intended to sell 20 million shares at a range of $23-27, but increased the offering to 34 million shares at a range of $27-31. It seems as though it was a great decision, as it added over 56 million dollars in value for the owners of the company. Unfortunately for individual investors, it appears that the price range of $27-31 was deemed a fair price by the market, and the stock only briefly hit a high of $34.25 before trending down the rest of the trading session.
While the market’s initial reaction was far from promising (if you had established a position at the beginning of the day you would actually be down 6.52%) I still believe that IBKR has some promise for the future. Interactive Brokers is an automated global electronic broker, and has shown strong growth in the past. I know someone who uses the IB platform, and they claim it’s a solid product. IB has differentiated itself through better pricing, speed, size, and diversity of global products and trading tools. I’ll definitely be watching on the sidelines to see which direction IBKR heads during the coming weeks.
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May 7th, 2007 at 6:10 am
Great trade man, nice to capture the ten percent gain!
-Sam from MarketMatador.com
May 7th, 2007 at 7:33 am
What I find surprising is that the stock closed the first day below the clearing price from the auction ($33). What would have happened if they had priced the shares at the clearing price, rather than at $30.01?
May 7th, 2007 at 7:09 pm
Looks like another crappy session for IBKR.
May 13th, 2007 at 2:51 pm
This thing is an unbelievable dog: it traded at 34.25 shortly after its open, and since that trade is down TWENTY PERCENT. In addition, the long-term outlook is HORRID, as is discussed here:
www.underactivebreakers.com
May 13th, 2007 at 3:41 pm
Who’s your broker? I’m prohibited from trading new IPOS for 2 weeks here at Fidelity. On the penalty of never been allocated anything anymore by them. Sucks.
May 22nd, 2007 at 7:09 pm
You sir are one disturbed individual. No hard feelings, eh?