Following up on the success of his first ever Internet fire side chat, which occurred on February 13, 2015, IBKR CEO Thomas Peterffy has scheduled his second Internet fire side chat for Friday night, March 6, 2015. Those who wish to ask Thomas questions during the chat should be encouraged to know that emailed chat room invitations will indeed be sent out this time. The subject will be a very important one, namely, the responsibilities that Thomas sees that a publicly traded CEO has to his actual and potential shareholders. Underactive Breakers will of course be recording and re-broadcasting the chat in its entirety soon thereafter.
Tune in! Ask questions! Enjoy.
This posting is spot on. The IBKR senior management can not respond to technological change in a core business, and it is costing the common shareholder plenty.
The Peterffy podcast revealed something seriously interesting about IBKR. Turns out that the several year old excuse that HFTs were ruining market making is not the issue. The actual issue is technological change, and IBKR refusing to acknowledge and respond to it. As underactive breakers reveals, IBKR's senior management is dropping the ball badly here, and, the two or three analysts that actually cover IBKR are not really asking the relevant questions.
The re-incarnated Underactive Breakers site is best viewed with... Internet Explorer! Why? Because via the use of the Windows Media Player ActiveX plugin, Underactive Breakers presents to the listener last Friday night's Thomas Peterffy fire side chat podcast immediately upon access!!! With appropriate visualizations!!!
Mozilla Firefox, Safari, and Chrome users, take note: you can access the podcast via clicking on it, but it isn't the same experience one gets if one accesses Underactive Breakers via Internet Explorer!!!!
UNDERACTIVE BREAKERS has posted the first ever Thomas Peterffy Fire Side Chat Podcast! Focusing on the market share of IBKR's TImberhill market making subsidiary, Thomas Peterffy makes the bold leap of revealing the true reason for the dramatic decline in Timberhill market share since 2006-7 -- an over 50% decline, in fact.
Enjoy! It's an mp3, so podcasters, you enjoy too!
Why not give it a rest. The market cap of the company is over $13 billion so I guess we can see why you still hold a grudge after getting fired years ago. Don't you have a life?
Via the Internet, this weekend legendary IBKR founder Thomas Peterffy will engage in, rather, INDULGE IN, his first ever fireside chat!!!!!! You, the actual and potential shareholder, are cordially invited!
The subject under discussion will be the options market making market share of IBKR subsidiary Timberhill. True, since 2007 said share has fallen by over 50%. However, it is not the case that interest in trading with Timberhill has been waning. Oh no no no. Rather, as Ian Faith would put it, Timberhill's appeal has "become more selective."
After the chat, UNDERACTIVE BREAKERS will publish the audio of the event IN ITS ENTIRETY!!!!!!
Please keep in mind the fact that Thomas Peterffy normally shuns the media, and doesn't like microphones, as they "weird him out." Nevertheless, he is going for it. See you, er, hear you then!
In the immortal words of Bill Aucoin, "You want the best, you got the best. The hottest website in the financial commentary world, UNDERACTIVEBREAKERS!!!!!!!!!!!!!!!!!!"
Only this time is going to be different... starting with fireside chats with the microphone wary Thomas Peterffy, commentary concerning Milan Galik, the impact of Robert Vermuellen upon punk rock in the state of Michigan, the true reason why IBKR has an office near Geneva, IBKR senior management seeing no obligation to the common shareholder, ridiculous forex "hedging" strategies, all kindsa things.
Call it... UNDERACTIVEBREAKERS MARK 2 KARAOKE EDITION!
As IBKR has revealed, in 2014, it lost $293 MILLION due to foreign exchange fluctuations impacting upon its capital. Don't believe the $293 MILLION? Read it here, under "Effects of Foreign Currency Diversification":
IBKR has been clever clever about announcing only part of its 1st quarter 2015 forex problem. Yes, some of its "professional trader" customers have barfed major league concerning the "Swiss Cheese" currency situation. Small potatoes as Dan Quayle would put it. The real question, once that they have not answered, is this:
What 1st quarter 2015 "forex translation" loss has occurred as a result of capital losses?
Another $293 MILLION? MORE? They are hiding this number.
SHORT FOR SPORT! SHORT FOR SPORT! SHORT FOR SPORT!
Because after a loss of this magnitude is taken into account, the 1st quarter 2015 net income available to common shareholders will be IN THE DUMPSTER.
Sentiment: Strong Sell
This makes two Q'a in a row currency woes have devastated earnings, think they need a better plan:
Last Q's excuses:
"Currency translation losses were $133.0 million this quarter, compared to a $46.2 million gain in the year-ago quarter. The decrease in market making profits, excluding translation effects, can be attributed to the ongoing competitive environment, lower volatility as measured by the CBOE Volatility Index, or VIX� and a trading error that resulted in a loss of approximately $16 million."
Then you would assume that they have a boatload of clients with debit balance that their systems cannot identify.... Gee, a Ponzi scheme maybe ???? Short them away and you will get filthy rich... Unless, unless, their systems are good if not great and they were able to identify righ away what clients were on a deibt position...
Actually, listen to the conference calls and I understood that the transactions in questions are mostly on the future trading side. And yes, they took a blow that they can absorb easily with their capital.
So, feel free to short and get rich. However, this might only be a speedbump caused by a one off event, and their broker platform (the true growth engine) is growing steadily at pretty good clip. And they have the potential to be a multibagger... So you shorting might be a bit risky...
Sentiment: Strong Buy
Don't take my word for it, here's the link:
$7.1 million in the 4th quarter??????
Look folks, the McDonalds restaurants of Cleveland, Ohio probably made $7.1 million in the 4th quarter. You know, the Christmas shopper was out and about, winter wasn't too bad, let's get a quarter pounder with cheese and fries...
Only the McDonalds restaurants of Cleveland, Ohio don't have FIVE BILLION DOLLARS of regulatory capital to blunder around with, cook up bizarre money losing "hedging" strategies with, and LOSE $293 MILLION in the process. That would be a lot of value meals!
Don't believe the $293 MILLION? Read it here, under "Effects of Foreign Currency Diversification":
The fact is that the senior management of IBKR are completely incompetent. What they are actually running is a money losing forex arbitrage disguised as a brokerage firm. Quarter after quarter, forex "translations" swamp P & L available to the common shareholder, and leave for the common shareholder, well, less than he would get had he invested in selling cheeseburgers to Cleveland. Even if he invested FIVE BILLION DOlLARS IN IT!!!!!!!!!!!!!!!!!!!!!!1
Company was quick to state said losses on swiss franc. What about their clients that were upside-down on other currencies. Their losses could be double after everything is looked at through the system. They might try to fudge the numbers and then surprise we were wrong.
Clearly time for round 2. Seven years! The stock doesn't move above the IPO as the broad market doubles! And by now, the "globals" have lost... prolly 500 million! Timberhill market share is way down! Other firms are co-locating high performance devices, and laughing at Thomas! The hilarious phrase that Thomas caused to be banned is still banned! No explanation for the Altana "conspiracy" loss!
The more things change, the more they stay the same.
I felt that my other famous online broker was taking huge advantage of me by charging an Option Exercised fee of $20.00 each time, that's a lot to eat into profits on each trade, plus a min. fee of 15.00 for less than 3 contracts. Switched to IBKR on advice from a friend, so far in 4 months, it's been okay. Not as pretty of an interface from others, but come on, ridiculous low fees and margin rates per trade.