THE IBKR SHUFFLE
Over the course of the nearly 11 months that IBKR has traded publicly, this writer has observed a very clever fraud on the part of IBKR, and the gullibility of the investing poublic with regard to it. That fraud concerns the "minority interest" that receives 90% of IBKR income after taxes. An example of the public's gullibility concerning IBKR stock is shown in this text taken from an IBKR-oriented message board:
"The "minority interest" line represents the money that the founder will cash in his pocket."
Actually, as any sophomore accounting student knows, it is illegal for any member of a "minority interest" to be a majority common shareholder (as the founder of IBKR currently is). It also would be highly improper for such an individual to be an officer or board member (as they could vote themselves more money).
Attempting to justify his incorrect understanding of the economic structure of IBKR, that misinformed trader posted two eleven month old quotes from IBKR Edgar filings:
"Minority interest reflecting IBG Holdings LLC's ownership of approximately 90% of the IBG LLC membership interests outstanding immediately after the IPO"
and this one...
"The Exchange Agreement also provides for future redemptions of member interests and for the purchase of member interests in IBG LLC by IBG, Inc. from IBG Holdings LLC, which is expected to result in IBG, Inc. acquiring the remaining member interests in IBG LLC that it does not own. On an annual basis, holders of IBG Holdings LLC member interests will be able to request redemption of such member interests over an eight (8) year period following the initial public offering..."
Clever, clever. Actually, there is nothing in the quoted Edgar filings (or any other filing by IBKR) that says that the minority interest will ever stop receiving 90% of income after taxes. In addition, there is nothing in an "exchange agreement" that "provides for future redemptions" and is "EXPECTED to result..." that forces the minority interest to give up their 90% in exchange for shares, which given that they are falling would be completely stupid. If the minority interest says "no, I don't want falling stock in exchange for real money," then no exchanges will occur, even if they were ever "EXPECTED" to occur.
The reality here is that someone other than the founder of IBKR is receiving 90% of IBKR income after taxes. Further, the identity of that individual has never been revealed by IBKR in any filing. That this is an intentional fraud on the part of IBKR is illustrated at this page on the firm's own website:
On that page, IBKR claims that "public stockholders" receive "100% of economic interest." THAT IS IMPOSSIBLE! The minority interest receives 90% of income after taxes, said payout occurring before the accounting of net income to the common shareholder. Open and shut fraud.
To those who are long common shares of IBKR, or planning to bid for more in the next round of issuance, I have this to say: PT Barnum would point out that nobody ever went broke underestimating your intelligence either.
Franky, you've avoided requests to show your evidence on what you post is true. You also say that 90% of the profits will always go to the minority interest even after new shares are issued. Please show your proof. I ain't holding my breath cause I know it ain't coming.
Ain't gonna happen. Franky da Chimp can't do that cuz is the real fraud. Nothing but mis-info coming from that tarts keyboard.
When IB completes their next offering the common shareholders % of the net profits increases accordingly. Franky da Chimp won't be able to come up with anything to dispute that fact.
Deliberately wrong and fraudulent again -- the minority interest does not represent any majority shareholder (which is illegal), or any unfloated stock, and gets its 90% BEFORE any shareholder gets a penny. All the 100% of common shareholders get is the remaining 10%. Which is all they will EVER get.
You can't be that stupid can you? 10% of the stock is publicly floated. Do you think it is a coincidence that that 10% gets 10% of the income?
Now if/when IBKR floats additional shares, are you going to pull your foot out of your mouth when the publicly floated common shareholders get a proportional increase in the income or are you going to make up some other story?
Franky Dude. All that cash they made is for real. Is it true you're spending most of your waking hours obsessing about this firm because you couldn't cut the mustard there and are jealous you're missing out of the rewards they are reaping with the IPO?
Frank Steiner has pointed out above what all of the hedge funds and mutual funds who are ignoring this stock have observed all along, that being that the corporate structure of IBKR is fraudulent.
And Eastern Warrior is pointing out what is obvious to all readers of this board. Frank Steiner = Edgar Reader. Don't you ever tire of posting to yourself under all those aliases. If you were as good at your job as you were at managing all those email accounts perhaps you might still have a job.
I get the impression that while unfortunate dumb fools think that the shares of IBKR that they own represent actually owning Interactive Brokers, the actual business that they only own 10% of might even be sold to someone else leaving them to be shocked when they realize they did not own that other 90%.