BMC34 Posted December 6, 2018 Share Posted December 6, 2018 It is available. Write up published on 10/13/18. Link to comment Share on other sites More sharing options...
fisch777 Posted January 15, 2019 Share Posted January 15, 2019 Wow just saw the Peterffy 10b5-1 plan. Looks like will be selling ~8% of ADV (30 day) for longer than any of us will be alive. I'm gonna go out on a limb and guess this creates a ceiling on the shares... Link to comment Share on other sites More sharing options...
Jurgis Posted January 15, 2019 Share Posted January 15, 2019 Wow just saw the Peterffy 10b5-1 plan. Looks like will be selling ~8% of ADV (30 day) for longer than any of us will be alive. I'm gonna go out on a limb and guess this creates a ceiling on the shares... Yeah, I read this in Barron's: "There is a lot of talk about this. People do not want to believe that I am not contemplating selling shares," he wrote in an email. "It occurs to me that if I create a plan to sell 20,000 shares every business day for the next 60 years or so, the issue will go away. So that is what I will do." His logic made very little sense to me. ::) Edit: BTW, this is the guy who said something like this in the proxy or annual: "If you're not customer of IB, you should sell your shares to people who appreciate this company ...". Pot kettle? ::) Link to comment Share on other sites More sharing options...
Jerry Capital Posted January 15, 2019 Share Posted January 15, 2019 Naw you're missing the point. This increases the float which has long been a overhang on the company. He owns something like 75% of shares outstanding. The guy is gonna die he is not calling pots certain colors like you infer, this is just part of his succession planning. Seems likely this gets taken over in the next decade, and even if it doesn't its a wonderful business at a fair price. Link to comment Share on other sites More sharing options...
bizaro86 Posted January 15, 2019 Share Posted January 15, 2019 It will create extra supply, but also creates more certainty around his intentions. That should reduce overhang on the stock a bit, or at least provide certainty around how much he is selling. One thought - will the extra free float/liquidity eventually qualify them for any indices they aren't in right now? That could add meaningful share demand at some point if it's the case (on phone on vacation, can't really research...) Link to comment Share on other sites More sharing options...
Peregrino Posted January 15, 2019 Share Posted January 15, 2019 Missed the bigger news from last week that he will be stepping down at the end of Q3 2019 as CEO, retaining his Chairman role. Link to comment Share on other sites More sharing options...
fisch777 Posted January 16, 2019 Share Posted January 16, 2019 I suppose it clarifies his intentions (vs. what exactly?), but it also is a slight "overhang" in a forced seller in the market every day for the next SIXTY years. I don't blame him, but it is definitely a wild card in owning the shares going forward. Link to comment Share on other sites More sharing options...
Libs Posted January 31, 2019 Share Posted January 31, 2019 Sorry if I missed this in the thread, but why is he selling his shares at all? Link to comment Share on other sites More sharing options...
Spekulatius Posted January 31, 2019 Share Posted January 31, 2019 Sorry if I missed this in the thread, but why is he selling his shares at all? Cause he can’t take them where he will be going eventually. Link to comment Share on other sites More sharing options...
MrB Posted February 1, 2019 Share Posted February 1, 2019 Sorry if I missed this in the thread, but why is he selling his shares at all? Cause he can’t take them where he will be going eventually. ;D Link to comment Share on other sites More sharing options...
Spekulatius Posted March 12, 2019 Share Posted March 12, 2019 I looked at some brokers 10-k (IBKR, SCHW) and it’s clear that the recent revenue and earnings gains are mostly due to increased interest income, due to the short term interest rates going higher than zero essentially. I am wondering however, if this tailwind has worked it way already. I am somewhat concerned that we have seen close to the high in interest rates and may eventually going back to zero with the next recession. That would cut IBKR‘s ‘s earnings by half and SCHW would be reduced even more so. Link to comment Share on other sites More sharing options...
kab60 Posted March 18, 2019 Share Posted March 18, 2019 I think that's a real possibility. And I think it's a real possibility that rates in the USA will turn negative like in Europa if/when there's a new recession which would obviously be bad for these guys. Now, that might or might not happen (or it might take long to play out), and in the meantime IBKR should continue to grow accounts meaningfully. IBKR was my second largest position but I sold out last week (to bridge a funding gap as I'm buying a car as well as a vacation home - negative rates hell yeah!). Anyway, when my financing is in place (I'm actually getting paid 0,2% to borrow - crazy world) I'm not sure whether or not I'll actually plow my funds into IBKR. 10 years into a bull market I think I might like some of my other bets more. Link to comment Share on other sites More sharing options...
stahleyp Posted March 18, 2019 Share Posted March 18, 2019 kab, how did you pull off getting paid to borrow? Link to comment Share on other sites More sharing options...
kab60 Posted March 18, 2019 Share Posted March 18, 2019 kab, how did you pull off getting paid to borrow? Welcome to Europe (Denmark) and ZIRP. There's basically (like very basic) two types of real estate loans here (both recourse). At the moment you can either get a loan with a fixed interest at 1,5 pct. for 30 years, or you can take out a loan with variable interest rates (there's different types that reset every year, every third year or every fifth). Since our family is not very sensitive to interest rates (low LTV), and since I expect rates to stay lower for longer, we opted for a loan with variable interest rates (that resets twice a year). It's actually negative atm (like -0,2 pct. I believe) so we get paid a bit to borrow (in reality we pay a tiny amount to the bank that services the loan, so after tax we probably pay around 0,2 pct. or something like that). Basically peanuts. (if there's further questions just drop me a message so we don't clutter this thread). Link to comment Share on other sites More sharing options...
fisch777 Posted March 25, 2019 Share Posted March 25, 2019 Wow. I (somewhat) understand negative yields on sovereigns, but negative rate individual mortgage is mind-blowing. I honestly had to sit here for a second and process that. IB is in interesting spot. The risk of declining US rates is very real (and scary for IBKR) at some point in the future, but accounts are growing like a weed, TAM is massive and the company seems to be smartly iterating its offering based on feedback from clients/investors. How are others thinking about handicapping the rate risk? Link to comment Share on other sites More sharing options...
Liberty Posted March 28, 2019 Share Posted March 28, 2019 https://traviswiedower.com/2019/03/27/interactive-brokers-maintains-its-strong-moat-but-kpis-worsen/ Link to comment Share on other sites More sharing options...
MrB Posted April 17, 2019 Share Posted April 17, 2019 Who knows which security the margin loss of $42m relates to? https://investors.interactivebrokers.com/ir/main.php?file=latestEarningsPR As previously disclosed, over an extended period in 2018, a small number of our brokerage customers had taken relatively large positions in a security listed on a major U.S. exchange. We extended margin loans against the security at a conservatively high collateral requirement. In December 2018, within a very short timeframe, this security lost a substantial amount of its value. The customer accounts were well margined and at December 31, 2018 they had incurred losses but had not fallen into any deficits. During the current quarter, subsequent price declines in the stock caused these accounts to fall into deficits, despite our efforts to liquidate the customers’ positions. For the quarter ended March 31, 2019, we have recognized an aggregate loss of approximately $42 million. The ultimate effect of this incident on our results will depend upon market conditions and the outcome of the our debt collection efforts. Link to comment Share on other sites More sharing options...
sleepydragon Posted April 17, 2019 Share Posted April 17, 2019 Who knows which security the margin loss of $42m relates to? https://investors.interactivebrokers.com/ir/main.php?file=latestEarningsPR As previously disclosed, over an extended period in 2018, a small number of our brokerage customers had taken relatively large positions in a security listed on a major U.S. exchange. We extended margin loans against the security at a conservatively high collateral requirement. In December 2018, within a very short timeframe, this security lost a substantial amount of its value. The customer accounts were well margined and at December 31, 2018 they had incurred losses but had not fallen into any deficits. During the current quarter, subsequent price declines in the stock caused these accounts to fall into deficits, despite our efforts to liquidate the customers’ positions. For the quarter ended March 31, 2019, we have recognized an aggregate loss of approximately $42 million. The ultimate effect of this incident on our results will depend upon market conditions and the outcome of the our debt collection efforts. DVA? ;) Link to comment Share on other sites More sharing options...
sleepydragon Posted April 17, 2019 Share Posted April 17, 2019 I guess another client of IBKR is ruined. I think about 15 years ago, I lost my entire savings trading stocks at IBKR. I have never opened account there again. The whole platform/GUI/cheap margins is designed so clients will trade as frequently as possible. It’s very tempting and addictive. It’s almost evil. Not buying it’s stock too (but it was a mistake) Link to comment Share on other sites More sharing options...
Guest roark33 Posted April 17, 2019 Share Posted April 17, 2019 I bet it was Apple, given the large decline in Apple in December, but I am just guessing. Who knows which security the margin loss of $42m relates to? https://investors.interactivebrokers.com/ir/main.php?file=latestEarningsPR As previously disclosed, over an extended period in 2018, a small number of our brokerage customers had taken relatively large positions in a security listed on a major U.S. exchange. We extended margin loans against the security at a conservatively high collateral requirement. In December 2018, within a very short timeframe, this security lost a substantial amount of its value. The customer accounts were well margined and at December 31, 2018 they had incurred losses but had not fallen into any deficits. During the current quarter, subsequent price declines in the stock caused these accounts to fall into deficits, despite our efforts to liquidate the customers’ positions. For the quarter ended March 31, 2019, we have recognized an aggregate loss of approximately $42 million. The ultimate effect of this incident on our results will depend upon market conditions and the outcome of the our debt collection efforts. Link to comment Share on other sites More sharing options...
sleepydragon Posted April 17, 2019 Share Posted April 17, 2019 I bet it was Apple, given the large decline in Apple in December, but I am just guessing. Who knows which security the margin loss of $42m relates to? https://investors.interactivebrokers.com/ir/main.php?file=latestEarningsPR As previously disclosed, over an extended period in 2018, a small number of our brokerage customers had taken relatively large positions in a security listed on a major U.S. exchange. We extended margin loans against the security at a conservatively high collateral requirement. In December 2018, within a very short timeframe, this security lost a substantial amount of its value. The customer accounts were well margined and at December 31, 2018 they had incurred losses but had not fallen into any deficits. During the current quarter, subsequent price declines in the stock caused these accounts to fall into deficits, despite our efforts to liquidate the customers’ positions. For the quarter ended March 31, 2019, we have recognized an aggregate loss of approximately $42 million. The ultimate effect of this incident on our results will depend upon market conditions and the outcome of the our debt collection efforts. It should be some stocks that gaped down/up, so broker couldn’t liquidate immediately. Link to comment Share on other sites More sharing options...
given2invest Posted April 17, 2019 Author Share Posted April 17, 2019 yes, exactly. it's not Apple, lol. and it had to be a pretty large company for them to have lost $40+M because: 1) that's only the amount lost by IB customers that cost IB to lose $40M after their accounts went to 0! 2) assume IB customers didn't own more than a few percent of the company the whole thing is very odd. it reads like IB is still long (or short?) the stock! why didn't they finish liquidating the position yet??? it all makes no sense. Link to comment Share on other sites More sharing options...
Jurgis Posted April 17, 2019 Share Posted April 17, 2019 yes, exactly. it's not Apple, lol. and it had to be a pretty large company for them to have lost $40+M because: 1) that's only the amount lost by IB customers that cost IB to lose $40M after their accounts went to 0! 2) assume IB customers didn't own more than a few percent of the company the whole thing is very odd. it reads like IB is still long (or short?) the stock! why didn't they finish liquidating the position yet??? it all makes no sense. Would indicate low or no liquidity. Not clear how this was marginable, but I'm not an expert on marginability at IBKR. Link to comment Share on other sites More sharing options...
given2invest Posted April 17, 2019 Author Share Posted April 17, 2019 yes, exactly. it's not Apple, lol. and it had to be a pretty large company for them to have lost $40+M because: 1) that's only the amount lost by IB customers that cost IB to lose $40M after their accounts went to 0! 2) assume IB customers didn't own more than a few percent of the company the whole thing is very odd. it reads like IB is still long (or short?) the stock! why didn't they finish liquidating the position yet??? it all makes no sense. Would indicate low or no liquidity. Not clear how this was marginable, but I'm not an expert on marginability at IBKR. They are really tough on margin. First, anything sub 250m market cap not marginable. Many under 500m. All biotech under 5b not marginable. So yah, they got fooled somehow by a mid cap that was illiquid and imploded. That's why I'm so interested in knowing what it is. And how many clients caused the 40m in losses. EDIT: Rereading this is INSANE " In December 2018, within a very short timeframe, this security lost a substantial amount of its value. The customer accounts were well margined and at December 31, 2018 they had incurred losses but had not fallen into any deficits. During the current quarter, subsequent price declines in the stock caused these accounts to fall into deficits, despite our efforts to liquidate the customers’ positions." At 12/31, the customers still had positive equity! The losses to IB all happened in Q1 and they STILL are long the damn stock!!!! It has to be super illiquid, very good catch. 2nd EDIT: That's why they won't tell us the security! They still long it! If we knew, people could pressure the stock knowing IB is long it and doesn't want to be and will sell at any liquidity event! Link to comment Share on other sites More sharing options...
writser Posted April 17, 2019 Share Posted April 17, 2019 I don't have a BB terminal, somebody should make a simple screener: biggest losers since December on low volume with a starting mcap > 300m or something. Fascinating indeed. It's 1000% not Apple .. They can liquidate any position in a day there. Probably something like a China / cannabis / resources related mid-cap. Link to comment Share on other sites More sharing options...
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