Comments on: Interactive Broker’s IPO Auction Opens April 16th 9am

by: Big Demand for Interactive Brokers (IBKR) IPO | Trading Stocks - Self Investors

Tue, 10 Jul 2007 15:01:32 +0000

[...] I'll be sitting this one out, but if you're interested in bidding, Interactive Broker (IBKR) customers can do it easily from their account page or you can go through other participants. Trader Narrative recently wrote up a nice summary about how the process works. In my opinion, these shares are going to get priced way above a reasonable valuation due to it's popularity. That doesn't mean it can't spike significantly higher still after hitting the open the market, but I just prefer to wait a few days for the dust to settle. At any rate, it will be an interesting to watch to for the rest of the year. For an interesting post on coming up with a valuation for Interactive Brokers (IBKR) have a look at Frank's post over at Technicator.net [...]

by: Babak

Tue, 17 Apr 2007 20:26:28 +0000

Kryslon,
I remember reading that in one of IB’s emails or somewhere ‘official’. Can’t find it now. But I could be totally wrong. In any case, I don’t think you win any advantage by dawdling. Thanks for the comment though

by: Kryslon

Tue, 17 Apr 2007 05:06:08 +0000

“The auction ends, at the latest, on May 3rd 2007. But because of the nature of the Dutch auction system it could very well end much sooner. Theoretically in one hour! since in that time, all 20 million shares could be spoken for.”

Begging to differ - the WRHambrecht site seems to indicate that the auction will be left open until May 3rd, and then some magic black box will examine ALL bids and figure out who bid high enough to get the 20M shares. At least that’s their description of the “Open IPO” process. Your thoughts?

by: Tyro

Mon, 16 Apr 2007 17:27:15 +0000

I’m really tempted to buy some, not because I’ve given careful consideration to the value of IBKR, but because I’m such a happy customer of theirs that I think/hope/wish IB will have a glorious future. I’m married to the stock before it has even opened - good recipe for a disaster

The “Dutch Auction” system sounds funky, but I think it’s close to how specialists open listed stocks. Let’s say the spec has a big sell order to fill, and a lot of buyers willing to buy different quantities at different prices. The specialist will open it at a level where the buyers and sellers match. Buyers who placed limit orders will get filled at the open price, so you can stagger your buying so that you will get the biggest fill at what you think is a good price.