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What Happened To The Interactive Brokers IPO? at Trader’s Narrative





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Interactive Brokers announced their plans to go public on November 27th, 2006 with the filing of an S-1. But since that announcement we’ve heard not a peep out of them.

The founder, Thomas Peterffy, continues to thumb his nose at the sell side firms by planning to use a ‘Dutch auction’ to distribute the shares. This is the same method used by Google and Lazard. Only two firms will place the offering: WR Hambrecht and E*Trade Securities. And they have already picked out a good symbol: IBKR.

There is a lot of great information about Interactive Brokers in their S-1. For example, did you know that IB makes 7 times more from market making as from their brokerage services? And most impressive, IB’s growth rate is still phenomenal. Their consistent growth is what sets apart IB from the rest of the brokers and makes their IPO very attractive. By early estimates the firm will probably be valued at around the $10 billion range. Which means that with an 85% ownership stake, Thomas Peterffy can afford a few more horses :)

The only disadvantage is that Peterffy has organized the IB Group in a very complex way and through a dual share structure has ensured that even with the firm in public hands, he will continue to maintain control. This isn’t a totally bad thing when you consider how IB has grown under his stewardship.

I’ve asked my contacts inside IB for more info, so when I hear back, I’ll update this.

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8 Responses to “What Happened To The Interactive Brokers IPO?”  

  1. 1 Kryslon

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    I wonder if it’s because of the weakness in the stock market … although FCStone who makes markets in commodities did pretty well in their IPO not too long ago. If he waits any longer for a “better market” to IPO Peterffy’s greed may catch up to him.

    Between Fortress and now Blackstone wanting to go public, it looks like the smart money’s cashing out to the dumb money …

  2. 2 Kryslon

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    well, what do you know, the next morning they file their S-1A ..

    interesting they acquired a whole bunch of new underwriters and E*Trade got demoted to bit player. I wonder if that had anything to do with the delay?

  3. 3 Babak

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    Thanks for the heads up Kryslon :)

  4. 4 John Z

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    Yeah, timber hill is very respected in the market making world and the IPO will be hot! Probably not like google, but 2x is possible in 6 months…Any insights appreciated!

  5. 5 Babak

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    Thanks, I just wrote about it. I agree, this has a lot of demand behind it. I suspect institutional.

  6. 6 Earthizen

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    The IPO was over-subscribed. The final price is $30.01 per share. See Efficient or Not

  7. 7 Babak

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    Thanks Earthizen, I wrote a short blurb about it too.
    Lets see how it does tomorrow. What’s your prognostication?

  1. 1 Interactive Brokers IPO Goes Forward - Offering Price $23-27 at Trader’s Narrative


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