Interactive Brokers [IBKR] IPO

Dangerous assumptions in that analysis. Dutch IPO’s usually don’t have price pops on the first day of trading as big as traditional ones, if at all, since the theory is that the market has settled on the concensus price at which most people have determinined the company is worth.

Ideally, the process enables insiders to price the stock at the “right” price. The IPO price theoretically should reflect the reasoning of thousands of investors who have determined what they are willing to pay for a share. Moreover, the company has no financial advantages by pricing their initially estimated range lower than what they really think their company is worth.

If you want to sell your car, would you intially price it at the highest price you think is reasonably possible, or at the lowest? So 23-27 range is already at the upper scale, not lower.

If you want to invest long term believing in the company’s future, then go ahead. With time and good business, the price may eventually advances from its IPO price, but don’t count on flipping shares on the first few trading day for a large gain. It’s a sucker’s game, although anything is possible in this momentum market.

I liked this entry because so few traders these days care about the actual valuation of the stocks they trade. Did you hear about Chinese Citic Bank that doubled on the first day? Sure a lot of speculators jump in and drive the prices up, but it took some deep pockets with huge money to make GOOG jump so far after its IPO. Doing some homework on what the company is really worth can help find some great investments. That is probably why AZN paid $16Billion for MEDI. The patents are worth so much for the next 20 years that the compay is worth it.

Chris

IBKR is worth $16-$17 price range compared to their
competition. FWIW

I bid 200 at 79 just in case…

You bid for 200 shares at $79? Or do you mean $29??

79, not 29….I want to make sure I get allocated because according to all the sites and info I have read this one may double on the first day…..

“According to my valuation, I think the company is conservatively worth $27-30/sh if they accelerate their earnings due to the IPO fundraising”
Why should they accelerate their earnings? The IPO is simply to pay off the owners. No money from IPO is going back into the business according to the prospectus. Value of company therefore 25.5$. Currently only hype and speculation is pushing it higher.

Say what you want but the big money will be made on IPO and you will be left scratching your head as to why it doubled. The net income was over $700m in 2006 and should be over $1bln by 2009 equating to $2.50 per share * 25p/e—$62.50 fair value in two years……

Wow, the demand is insane. 145 million shares bidded over $30.01.

That’s 105 million excess shares looking to buy it at the open.

I got all of my shares so I am looking for some action.

Where are all those geniuses that predicted a double?

They may be the ones that finally threw in the towel and sold near the low of the day today. As I mentioned, this IPO was utterly overhyped. A sucker’s game, indeed.

Anyone interested in Interactive Brokers should check out http://www.underactivebreakers.com.

Check out my post here:

http://www.wallstreetmatador.com/stock-charts/ibkrs-ipo-results/

WSM

i missed the IBKR bid by 50 cents!

Sounds like somebody got fired and has their own set of issues.