Interactive Brokers plans to sell shares in an initial public offering that could raise up to $500 million for the electronic broker's owners.
The Connecticut-based firm says it will sell shares to the public using a modified "Dutch auction'' approach, in which demand from investors will determine the price of the shares.
The proceeds from the offering will go toward buying a 5% equity interest in IBG Holdings, the privately held company that currently owns Interactive Brokers. IBG Holdings is controlled by Thomas Peterffy, Interactive Brokers' founder and CEO.
Shares of Interactive Brokers, which will trade on the
Nasdaq Stock Market
under the ticker IBKR, earned $578 million during the first nine months of this year. Net revenue over the period totaled $969 million.
The firm specializes in executing and processing both stock and futures trades.
In a typical IPO, the Wall Street firms underwriting the offering set the price for the shares. But some on Wall Street say a Dutch auction is a better way to ensure that a company gets the maximum price for its shares and doesn't leave any money on the table.
The most notable case of a company choosing to sell shares through a Dutch auction was
The Interactive Broker deal is being led by W.R. Hambrecht, a big proponent of Dutch auction IPOs, and