Last week Seeking Alpha published an Alpha-Rich article arguing Interactive Brokers is undervalued. That investment opportunity is a financial Fata Morgana.
The original Alpha Rich thesis to invest in Interactive Brokers is based on a scenario where the underperforming market making part of the business is liquidated. The money then paid out to shareholders. The author then proceeds to value the remaining brokerage business by comparison to competitors.
Two pillars of the original story:
- Liquidation value of the underperforming - market making - part of the company
- Valuating the healthy - brokerage - part of the business at a 1.15 - 1.2 billion
About the liquidation value Arnold wrote:
In order to keep the analysis
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