Ig Share Discussion Threads

[apad] 22/1/2021 15:13

Chess123 buying before the results would have been a great call if it wasn't for the proposed acquisition.
FWIW I am sitting on my hands trying not to follow my instinct and bail out after the bad news has had time to percolate.
I've started to follow tastytrade on social media in case my initial opinion is wrong.
For example:
68 employees and 4 vacancies on Linkedin.
Anyroadup, thanks for the compliments and good luck.

apad
infelix coney

[chess123] 22/1/2021 15:02

Thanks APAD, I bought in before results , and to be honest the opposite has happened , I thought the share price would go to 950 /980p so well under, I'm hoping the market starts to embrace this deal, and once more thanks for all your very informative posts.

[apad] 22/1/2021 14:23

Only pressure from funds and instis Chess123

'felix' means happy

'infelix' is the opposite.

apad

[chess123] 22/1/2021 13:59

Wonder if Igg can still change there mind, and kick yucky Trade into touch, says proposed merger, Couldn't believe it when I checked Sp, and down 46p , at this rate we will soon be below 700p, there is something about this that doesn't add up.

[apad] 22/1/2021 11:52

Spitting bricks about IGG.
I remember thinking "couldn't they have found someone better" when they appointed the CEO.
It took me too long to research the target, I should have gone on instinct and bailed out at the announcement, but it is difficult to dump a conviction hold.
Anyway their story has now changed fundamentally.
The dung heap they have bought could easily be crippled by US legislation or be fined like Robinhood.
The notion that it could be rolled out internationally using IG systems is derisory.

apad

[chess123] 22/1/2021 11:41

Seems like the share price is in free fall.

[jimbo123elf] 22/1/2021 11:29

June Felix has crashed sentiment here with the weird acquisition of Tastytrade. £6 soon? I wouldn't be buying even at that price.

[sirrux] 22/1/2021 11:28

Some interesting comments above.

I can imagine some "boring" institutions being unhappy with the Tasty news.

They have clearly signalled they are betting big on growth and probably plan to take it to a $10bn+ market cap to match with the bigger US-based brokers.

I agree with an earlier poster that the UK markets are a mess and need shaking up. Much more growth is required, dividends are bad news post COVID and suggest a lack of imagination, having no better use for the money.

So, we will see some dividend loving institutions pull money, but growth loving institutions will be looking for entry and watching carefully. We'll see where we are by the end of 2021.

[frazboy] 22/1/2021 11:22

Chess, nothing much to add to what folk have already said. It seems reasonable to assume that we're going to see a bit of shareholder churn as those that liked IG for it's relative safety in the CFD/spread betting space swap out for those that are bit more risk averse (I would fall into the former category). I don't have a holding here, having offloaded as it rose into the 800s but it was my go to stock in the sector for the reason I just outlined, and because it was a buy in a falling market with rising volatility, and frequently the share price sold off with the market which was bizarre!

[aleman] 22/1/2021 11:20

Seems I was beaten to it.

[apad] 22/1/2021 11:19

IC Kiss of death.

"All of which feels like further vindication of IG’s international push, and a sign that the trajectory is towards growth, however volatile. Speculative buy.

Last IC View: Hold, 816p, 23 Nov 2020"

apad

"A strong set of interim results for IG Group (IGG) were trumped by news of the investment platform’s proposed acquisition of fast-growing US online brokerage tastytrade, in a $1bn (£733m) deal funded by $300m in cash and the issue of 61m new shares.

Founded in 2011, tastytrade comprises two entities: a financial education network with an audience of just under a million “knowledgeable” traders, and a fast-growing online options and futures brokerage in the world’s largest derivatives market.

As is standard practice, IG shareholders have been assured the transaction will prove accretive to earnings per share – albeit by low single digits and on an adjusted basis – in the first full year post-completion. The company points to minimal risks associated with integration, client attrition and absence of cost synergy targets as sources of optimism.

Numis saw this is as reason to lift its adjusted earnings expectations to 63.7p per share for the year to May 2022, though FY2021’s forecast was held at 72.3p. Some investors will require more convincing, judging by the muted immediate market reaction to the deal.

One concern could be valuation. IG is paying just over 20 times’ tastytrade’s pro-forma pre-tax profits for 2020, a banner year for client activity but one in which the pre-tax margin also slipped from 57 to 42 per cent. By contrast, IG trades on less than eight times’ trailing pre-tax profits for the 12 months to November, while margins climbed to 55 per cent for the half-year period, up from 40 per cent the prior year.

Having canvassed plenty of opinion, chief executive June Felix told us she is convinced IG is buying into a long-term secular shift toward self-directed trading, rather than a Covid-inflated bubble. “This is not Robinhood, this is a deal focused on customers who know what they’re doing,” she said.

Nevertheless, wherever retail-focused derivatives platforms go, twitchy regulators are never far behind. What assurance does IG have that tighter market oversight is not coming, particularly with the incoming Securities Exchange Commission chairman Gary Gensler yet to lay out his priorities?

“No-one can predict regulation,” acknowledged Ms Felix. “But this is a well-established, well-regulated business today. There217;s much more understanding of equities markets [in the US], of which options and futures are a sub-set.”

Shareholders can at least take comfort from a proactive attitude toward the UK financial watchdog, which last week warned cryptocurrency investors should be prepared to lose all of their money. IG says it is winding down its crypto products and positions here.

The recent bitcoin price rally has nonetheless been good news for IG, whose crypto asset holdings tripled in value in the six months to November, to £66.9m. Some of that was due to increased hedge positions in markets, such as Japan, where the trading of cryptocurrencies and their derivatives is more tolerated."

[cwa1] 22/1/2021 11:13

Taken a small amount at just under £8. Keeping some powder dry on this one case it drifts back to the 740-760 region

[cwa1] 22/1/2021 11:12

Behind paywall Aleman, any chance of a precis?

[aleman] 22/1/2021 11:11

Looks like Numis has raised forecasts slightly to 63.7p for 2022. (I think it was a little over 60p?)

[chess123] 22/1/2021 11:05

Thanks Fraz, Any thoughts on market reaction.?

[frazboy] 22/1/2021 10:38

"also the lower the share price the more shares are needed to buy yuky trade."

I've looked through the RNS and the way I'm reading it, the share issuance is fixed.

"Total consideration of $1.0 billion to be paid to tastytrade's shareholders, comprising $300 million in cash and the issuance of 61.0 million IG shares, valued at $700 million"

Happy to be corrected.

[chess123] 22/1/2021 10:23

Doesn't seem to be any resistance showing at the moment, my guess is we're going below 800p, looking on level 2 the sells are relentless, I'm guessing the market is still Digesting this and the more they see the more they dislike, no one is buying, if we go below 800p my guess is next stop 760p GLA.

[chess123] 22/1/2021 10:01

Was thinking of buying more, but a wise wealthy 50 year old told me
it's always best to wait 3 days before buying shares that are dropping like a stone, think igg paid 300 million to much ,also the lower the share price the more shares are needed to buy yuky trade.

[apad] 22/1/2021 09:28

Stumbled across an IG CEO statement saying that tastytrade is not a Robinhood and that its customers are 50 year old wealthy folks. Yeah Right!

It's clear that the current market has triggered a lot of US gamblers who will stop when the market merry go round stops and it doesn't matter what their ages are.
This is a mindblowingly expensive buy at the top of a crazy market.

They also argue that they will use the IG infrastructure to spread tastytrade around the world. Perhaps they haven't noticed that the rest of the world is different from the US.

apad

[glavey] 22/1/2021 08:12

"reflecting its agency-only brokerage model."

Does anyone have a handle on how this functions?

[podgyted] 21/1/2021 23:46

Graham Neary used to share the writing of the SCVR on Stocko with Paul Scott and has always been very positive on IGG - no longer it seems.

[apad] 21/1/2021 22:14

I don’t suppose the funds and institutions that own IG will stop the purchase and fire the CEO?

apad

[jaz123] 21/1/2021 21:50

For the financial year to 31 December 2020, tastytrade delivered revenue of $116.2 million11 (up 44% year-over-year; 31 December 2019: $81.0 million), Adjusted EBITDA of $54.1 million12 (up 43% year-over-year; 31 December 2019: $37.8 million) and profit before tax of $49.0 million (up 5% year-over-year; 31 December 2019: $46.5 million), with growth in active accounts of 85%13 over the same period, reflecting both structural sector growth and tastytrade’s continued disruption of the US retail market. tastytrade’s gross assets were $200.5 million14 as at 31 December 2020, with a regulatory capital requirement of c. $0.5 million reflecting its agency-only brokerage model.

hxxps://www.finextra.com/pressarticle/85811/ig-group-to-spend-1-billion-to-acquire-tastytrade?utm_medium=rssfinextra&;utm_source=finextrafeed

[apad] 21/1/2021 21:19

Tom Sosnoff (born March 6, 1957) is an entrepreneur, options trader, co-founder of Thinkorswim[1] and tastytrade, and founder of Dough, Inc. He was Senior Vice President of Trading and Strategic Initiatives at TD Ameritrade.[2][3][4][5] Sosnoff promotes option trading as an important financial strategy for the individual investor. He has promoted this view by founding an online financial network, tastytrade, and by developing software products to support individual investor options trading.

Google Tom Sosnoff and tastytrade.

It's horrific.

apad