Author Topic: IBKR - Interactive Brokers  (Read 169045 times)

chompsterama

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Re: IBKR - Interactive Brokers
« Reply #550 on: August 26, 2019, 12:41:01 PM »
https://www.bamsec.com/transcripts/12474984?hl_id=41w5n7pnw

"We've said -- so right before the trade war happened, 16%, 1-6 percent, of our accounts were from Mainland China. That would be about 80-odd thousand, but we've also disclosed that all those accounts are maybe 1% of our revenues"

In other words, if your theory played out it could be a concern in regards to future revenue opportunities and is almost no risk to the current business.


scorpioncapital

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Re: IBKR - Interactive Brokers
« Reply #551 on: August 26, 2019, 01:53:54 PM »
Based on latest 10-q it appears for 6 months they paid a tax rate of 5.3%. This seems extremely low. I understand they have some sort of partnership structure but looking at the profitability of the business from a shareholder perspective should one normalize the tax rate to say 20 or 30% to get an apple to apple comparison of the net profitability to shareholder?

chompsterama

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Re: IBKR - Interactive Brokers
« Reply #552 on: August 26, 2019, 02:34:38 PM »
Based on latest 10-q it appears for 6 months they paid a tax rate of 5.3%. This seems extremely low. I understand they have some sort of partnership structure but looking at the profitability of the business from a shareholder perspective should one normalize the tax rate to say 20 or 30% to get an apple to apple comparison of the net profitability to shareholder?

yep

KCLarkin

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Re: IBKR - Interactive Brokers
« Reply #553 on: August 26, 2019, 03:01:47 PM »
Based on latest 10-q it appears for 6 months they paid a tax rate of 5.3%. This seems extremely low. I understand they have some sort of partnership structure but looking at the profitability of the business from a shareholder perspective should one normalize the tax rate to say 20 or 30% to get an apple to apple comparison of the net profitability to shareholder?

No. This is an artifact of the partnership structure. What you need to do is split the operating company income between the public shareholders and private shareholders first and then deal with the corporate taxes. The taxes last quarter are close to 20%, after accounting for the public/partnership split.

From the transcript:

Quote
To help investors better understand our earnings, the split between public shareholders and the noncontrolling interest is as follows:
Starting with reported income before income taxes of $225 million, we removed $1 million net expense attributable only to the public company to get pretax income for the operating company. We then deduct $9 million for income taxes paid by our operating companies, which are mostly foreign taxes.
This leads $217 million, of which 82%, or that $178 million reported on our income statement, is attributable to noncontrolling interest. The remaining 18%, or $39 million, is available for the public company shareholders. But as this is a non-GAAP measure, it is not reported on our income statement.
9
After we add back the $1 million net expense attributable only to the public company and deduct taxes of $6 million owed on the remaining $38 million, net income available for common stockholders is the $32 million you see reported on our income statement. The income tax expense you see on our income statement of $15 million consists of the $6 million paid by the public company plus the $9 million paid by the operating company.

chompsterama

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Re: IBKR - Interactive Brokers
« Reply #554 on: August 26, 2019, 03:46:57 PM »
from a shareholder perspective should one normalize the tax rate to say 20 or 30% to get an apple to apple comparison of the net profitability to shareholder?

yep
So...yep.

scorpioncapital

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Re: IBKR - Interactive Brokers
« Reply #555 on: August 27, 2019, 12:19:17 AM »
From what KcLarkin wrote, I get the impression the net income number after deducting the (large) minority interest includes something like 90% of the higher tax rate at the public company level and a small amount like 85% * 9 million paid by the operating company which will be a smaller amount?


chompsterama

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Re: IBKR - Interactive Brokers
« Reply #556 on: September 26, 2019, 12:55:09 PM »
IBKR to robinhood (verb) robinhood (the business)

https://www.interactivebrokers.com/en/index.php?f=45196

It's nice to see Peterffy change his mind on this.  It's always nice to see people act with how the world works vs. how it should work.  If Robinhood is any guide, this should be a good customer acq. tool.  Just hope the customer service to support it isn't ominous. 

given2invest

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Re: IBKR - Interactive Brokers
« Reply #557 on: September 26, 2019, 01:34:49 PM »
IBKR to robinhood (verb) robinhood (the business)

https://www.interactivebrokers.com/en/index.php?f=45196

It's nice to see Peterffy change his mind on this.  It's always nice to see people act with how the world works vs. how it should work.  If Robinhood is any guide, this should be a good customer acq. tool.  Just hope the customer service to support it isn't ominous.

IB customer service w/ their paying service is atrocious so I'd expect it to be...

DooDiligence

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Re: IBKR - Interactive Brokers
« Reply #558 on: October 01, 2019, 06:08:21 AM »
Couldn't find a Schwab thread so I'm putting this here,

https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html

Apologies if this turns out to be an Onion article that CNBC picked up.
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Liberty

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Re: IBKR - Interactive Brokers
« Reply #559 on: October 01, 2019, 06:29:39 AM »
https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html

"Charles Schwab said on Tuesday that it is ending commissions for online trading.... Shares of Schwab fell 5% in premarket... TD Ameritrade plummeted more than 16%, ...  ETrade shares cratered more than 14% in premarket trading." [IBKR -4.7%]
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