IBKR Market Cap at 10.5 BLN ?!

Value ?

  • Nice - I like it and feel it creates just great shareholder value

    Votes: 5 31.3%

  • No, I feel it's too high and performance outlook (long term) thus is limited

    Votes: 11 68.8%
  • Total voters
    16
L

local_crusher

As it is Sunday afternoon here and I feel a bit bored, I just wanted to discuss here whether you consider IB's targeted market cap of ~10 bln USD "justified".

Let's look for a few comparisons (I know it cannot be compared this way, but the figures speak too nicely!):

- NITE, the market maker, is only 1.5 bln. And this firm is not too different!
They have the same problem - both suffer from insider trading !

- Order Routing: GLTrade, which has superior software (IB even routes Asia through them!) connected to ~100 marketplaces around the world, is valued around 500 million.

- NYSE + Euronext is worth around 15 bln. Charles Schwab is roughly in the same league.
 
They are the Wallmart of brokerage right now. Lowest cost per transaction and the greatest number of products offered. There are huge economies of scale in this business and I think they are positioned better than their competitors. In fact, Etrade, Ameritrade, and Schwabb will have to merge to attempt to remain competitive.

That being said. More than 70% of their money comes from market-making. It will be very difficult for them to keep increasing this side of their business as fast as it has grown in the past.

Hopefully their brokerage business will carry the weight and justify their 22pe.

IMHO, IBKR is a good long term hold.
 
Quote from local_crusher:

Any more VOTES, PLZ
More...

Vote? LOL. They vote every day on NASDAQ as to what this stock is worth, only they do it with money.

OldTrader
 
My opinion on IBKR is very well known here in this forum. The IPO was priced way too high and they pulled a Vonage and they offered IPO shares to their customers.

I believe this stock will chop sideways to down in the next 6 months because of these tactics.

Last year, IPOS were priced very fairly. This year everything is overpriced and comes flaming in like the Challenger. The attitude this year is "take the money and run" and thats what Thomas Peterfly is doing right now. Take that money and run, leave the shareholders left holding the bag.
 
You must log in or register to reply here.
Back
Top