Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Interactive Brokers: Looking For A New Broker, I Found A Compelling Investment

Over the weekend, I went in search of a new online broker. What I found was not only a better broker than I use currently, but also a compelling investment opportunity. Interactive Brokers (NASDAQ:IBKR) ("IB" or "the company") is an undervalued online brokerage ("the brokerage") and market making ("the market maker") business, undergoing significant transformation which is causing shares to trade at a discount.

In particular, IB CEO and Founder Thomas Peterffy has indicated to the market that IB will wind down the market maker business if acceptable rates of return cannot be generated (generally defined as a 10% return on equity on recent conference calls), and return value to shareholders. I understand that the rise in high...

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