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    Interactive Brokers (IBKR) IPO

    By Stock Charts | May 2, 2007




    ib.jpgInteractive Brokers is a online brokerage firm that will be IPOing in the next few weeks. They have decided to go with the Dutch Auction method that Google used in their initial public offering. The IPO range was just raised from $23-27 a share to $27-31 a share, a strong indication of high demand.

    Since our inception in 1977, we have focused on developing proprietary software to automate broker-dealer functions. The advent of electronic exchanges in the last 16 years has provided us with the opportunity to integrate our software with an increasing number of exchanges and trading venues into one automatically functioning, computerized platform that requires minimal human intervention. Our high degree of automation enabled us to process on average 518,000 trades per day with an average of 505 employees in 2006. During 2005 and 2006, we generated pretax income in each period at an annual rate of more than $1 million per employee. Publicly available data regarding other companies in the securities and commodities industry indicate that this level of productivity is unparalleled for our industry. Automation has allowed us to become one of the lowest cost providers of broker-dealer services and to increase significantly the volume of trades we handle.

    According to data compiled by the Futures Industry Association (FIA) based on data received from exchanges worldwide, in 2006, we accounted for approximately 15.9% of exchange-listed equity options volume traded worldwide and approximately 18.7% of exchange-listed equity options volume traded on those markets in which we actively trade. We were the number one liquidity provider on each of the three largest U.S. options exchanges (the Chicago Board Options Exchange, the International Securities Exchange and the Philadelphia Stock Exchange) during 2006, according to rankings provided by these exchanges. We serve sophisticated and active customers worldwide, including institutional investors, financial advisors, brokers and individuals. Our business includes two subsidiaries registered as broker-dealers under Section 15 of the Securities Exchange Act of 1934, namely Timber Hill LLC, our U.S. market making subsidiary, and Interactive Brokers LLC, our U.S. electronic brokerage subsidiary.

    Read the rest of the prospectus here. Frank over at Technicator.net has again provided pretty in-depth valuation of Interactive Brokers. Bidding should end fairly soon, so do your DD quickly, and get those bids in!

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    Topics: Stock News | 5 Comments »

    5 Responses to “Interactive Brokers (IBKR) IPO”

    1. Investing Blog Says:
      May 2nd, 2007 at 5:16 am

      What’s your take on the IPO? IB is the only broker I know that allows US investors to trade in foreign currencies. I think the IPO will bid high, but who knows about the long-term.

    2. Market Matador Says:
      May 2nd, 2007 at 8:01 am

      Hey Investing Blog!

      E*TRADE is going to offer global trading in foreign currencies in the very near future. I definitely think you should ignore this IPO. The brokers have been horendous, and the competition is just heating up.

      -Sam from MarketMatador.com

    3. The Matador Says:
      May 2nd, 2007 at 10:56 am

      Be that it may, I think there’s a high possibility that IB will gap up in the first couple of days! I put in a bid for 100 at 31, we’ll see how that plays out… it’s really just a gamble, but it’s not a big position so what the hell.

    4. m Says:
      May 2nd, 2007 at 11:15 pm

      market matador, are you sure you know what you are talking about. Etrade is in a different league and deserves to trade at half the multiple IB. Ignore an IPO that has demand for 5x as many shares as being offered. You must be out of your mind bud. Stick to buying your E-trade and watch IB triple by 2010. They own stakes in BOX, ISE, and CBOE exchanges and are the number one liquidity provider for options worldwide. The futures trading growth is around 30%/year. How much net income does each Etrade employee make for the company….a few thousand at most. On the other hand, each IB employee generates over $1.1 million in net income. Bottom line, turning down a great opportunity to actually make money.

    5. IBKR IPOs Tomorrow! | The Wall Street Matador Says:
      May 4th, 2007 at 3:21 am

      [...] mmarket matador, are you sure you know what you are talking about. Etrade is in a different league and deserves to… [...]

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