Shareholders want to sell TOM
Dutch alternative derivative exchange TOM is for sale. The shareholders agreed to sell the business. It wasn’t a well-kept secret. The rumour has been making rounds for a few weeks. Hans Pieterse is appointed with a mandate to sell it. It’s an interesting case (press release).
Too many captains
There are a lot of shareholders. First, there’s retail broker Binck. From the clearing side, there’s ABN AMRO Clearing. Market makers Optiver and IMC Financial Markets have a stake. Finally, there’s NASDAQ as technology provider. NASDAQ has an option to buy 50,1% of TOM. The former CEO Willem Meijer still owns 1,1%. Each shareholder on the ship has their own strategic priorities.
Foreign expansion
That’s five large shareholders, from four different fields. And each of them had a different vision of the future strategy of the exchange. It must have been frustrating, as the shareholders couldn’t agree on the strategy. NASDAQ is in the mood for foreign expansion. Other shareholders don’t feel the need for this. Expansion comes at a price. The current setup already requires the shareholders invest extra money to keep it running.
Word is ABN AMRO Clearing has been told to divest, and Optiver and Binck want out.
Costly exchange
The exchange lost money every quarter. Even with monthly trading volumes well above one million option contracts, the bottom line remains negative. Last year (2015), the loss amounted to €2,6 million. A part may be explained by the high legal costs. The never-ending legal battle with Euronext doesn’t come cheap. And it’s not over yet, Euronext is preparing a claim.
Succesful competition
The arrival of a new contender didn’t go unnoticed. Euronext used to have a monopoly, and responded with lowering fees. The fees are cut with 60%. TOM gained a market share of 40% in the Dutch option market. The future market failed, all AEX FTI Futures stayed at Euronext.
Unfortunately, Binck’s retail clients didn’t benefit. Binck paid lower fees, but didn’t change the fee schedule for their own clients.
Power position for DeGiro
The TOM MTF exchange has one weak spot. It’s dependent on just one broker for the order flow (Binck). That’s an unhealthy situation. DeGiro isn’t connected to TOM. Instead, the DeGiro decided to go into a partnership with Euronext.
Executing retail option transactions at Euronext is €0,10 more expensive. DeGiro does around 700.000 option contracts per month, at this premium price. That’s €70k DeGiro could save by switching to TOM, every month. The idea is Euronext is paying DeGiro a similar amount, under the cloak of “information services for investors”.
If DeGiro moves to TOM, Euronext will lose the battle. They can’t allow that to happen. In the current situation, TOM remains dependent on Binck. Euronext is keen on keeping their rival isolated.
NASDAQ not exercising the option
The NASDAQ has the option to buy 50,1% of TOM. They are reluctant to exercise the option, as long as the exchange is too dependent on Binck. I wouldn’t be comfortable, being dependent on Binck. The broker keeps losing ground. NASDAQ’s option expires next year.
Other buyers
InterContinental Exchange (ICE) has spun off European exchanges back in 2014. Wouldn’t be a likely buyer. CME Europe under management of CEO Cees Vermaas could be an option. But a retail oriented option exchange doesn’t seem a natural fit.
Euronext could buy TOM and regain monopoly in the business. In a few years time, they could raise the prices again. That would be odd. A competition review from Brussels would be required.
Focus on Binck
AXECO is handling the sale of TOM. It will be interesting to see who surfaces as ultimate buyer. Any interested entity will spend a lot of time analysing Binck. And DeGiro (over here, next week more news on DeGiro).
Dress up
In the meantime, TOM is dressing up to look like an attractive target. A lot of people have been fired or decided to leave. The price tag is hard to estimate. Binck has valued the exchange at €4,7 million.
Binck is not the only one connected to TOM. You can also trade on TOM with IB (Lynx / Todaysbrokers).
a simple case, they just don’t make money and as we know traders are instructed to cut losses so logically IMC and Optiver want to be out no matter who is the CEO
AAB is also trading via TOM
ABN is connected indeed. But they have no flow. Same counts for ING and RABO. Not enough flow to worry about.
Anyone has an idea of the price range for TOM?
Kom op TraderJ_ack, het Binck-bashen begint te vervelen net als het slijmen over de ‘fraaie’ groei bij Degiro.
https://twitter.com/020trader/status/790420736909402112
https://fd.nl/beurs/1172409/degiro-ziet-klantenbestand-verder-groeien
Sinds jaar en dag strooien ze bij Degiro met percentages en aantallen die uit de lucht lijken te zijn gegrepen en haaks staan op eerdere uitlatingen. De werkelijke gestage groei bij Degiro stagneert namelijk. Tegenover een klantenbestand van 95.000 per eind 2015 staat de teller inmiddels op 128.000. Boven hun vermeende “autonome” groei van 3.000 klanten per maand (zie hun prospectus voor de participaties) worden er kennelijk nauwelijk nieuwe klanten gewonnen ONDANKS aanzienlijke marketinguitgaven. Er worden miljoenen aan reclame uitgegeven en dat levert kennelijk 6.000 klanten op in 9 maanden tijd! Ho-lee fuck. De rest van de groei is naar eigen zeggen autonoom en vereist geen marketing. Gemiddeld zijn de nieuwe klanten ook minder actief dan de oude, want het aantal transacties stijgt langzamer dan het aantal klanten.
Werden er in de eerste helft van 2016 4,4 miljoen transacties uitgevoerd, over de eerste drie kwartalen waren het 6,7 miljoen. Groei: nagenoeg nul ondanks een groter klantenbestand. Natuurlijk, als je terugkijkt naar drie jaar geleden is er flinke groei. Maar ten opzichte van eerder dit jaar, ho maar.
Dan de vermeende winst van Degiro. In het eerste kwartaal van 2016 werd snel ruim een miljoen binnengeharkt toen Degiro met terugwerkende kracht haar 100.000 klanten kosten in rekening bracht voor “setting up connection fees” (wtf?). Aldus werd over het eerste kwartaal een winst van 1,3 miljoen bewerkstelligd:
https://fd.nl/beurs/1149028/degiro-boekt-voor-het-eerst-winst
Volgens hun persbericht (te vinden op hun website) was de winst over het eerste halfjaar 1,8 miljoen. Volgens het persbericht van vandaag was de winst over de eerste drie kwartalen 1,5 miljoen. Degiro draait dus weer met verlies, ondanks de spectaculaire groei bladiebla. Al deze winstcijfers zijn trouwens netto vanwege de aanzienlijke verliezen uit het verleden. Maar de eeuwige optimist Gijs Nagel spreekt liever van een “verbeterde (!) winstgevendheid dankzij schaalvoordelen” terwijl er VERLIES wordt geboekt in Q3. Ha ha ha. FAKE IT TILL YOU MAKE IT!!! Ga zo door Gijsje!
Toegegeven TraderJ_ack, je had wel door dat er een luchtje zat aan de gerapporteerde winst in 2016 die afvlakte in het tweede kwartaal na een “sterk” eerste kwartaal:
https://twitter.com/020trader/status/757824101826256896
https://twitter.com/020trader/status/757824885745778688
De uitleg staat hierboven.
Laten we ook niet vergeten dat de marketinguitgaven inmiddels worden betaald vanuit de opbrengst van de participaties wat de ‘winst’ van Degiro verder flatteert. Het zou mij vandaag dun door de broek lopen als ik een van de gelukkigen zou zijn die participaties in de groei van Degiro heeft gekocht. Volgens mij zijn de cijfers van Degiro desastreus, maar TraderJ_ack jij noemt ze fraai. Wat zie jij dat ik niet zie???
Wat een jaloerse reactie hierboven zeg.
Binck zit al jaren in een neerwaartse spiraal en weten niet meer waar ze geld aan kunnen verdienen. Als je al moet kijken naar spaarrentes uitzetten bij onbekende buitenlandse banken voor een paar tienden procent meer rendement op spaargeld dan weet iedereen dat hun bedrijfsmodel ten einde loopt.
DeGiro geeft veel geld aan marketing uit, maar de geworven klanten zullen niet weglopen als zij dat fors zouden verminderen, en dan blijft een stevig winstmakend bedrijf staan.
In mijn omgeving zitten de beleggers ofwel bij een grootbank om de naam (ING, UBS etc.) of bij DeGiro omwille van de kosten en mogelijkheden van de markten waarop je kunt beleggen.
Jaloers? Waarop? Een toko die eenmalig een klein winstje eruit kan persen door haar klanten beet te nemen met “setting up the connections”? Of ben ik jaloers op hun kwijnende hedge fund HIQ dat de klanten van Degiro structureel in het pak naait met “join orders”? Misschien ben ik wel stiekem stinkend jaloers op de gladde praatjes van Gijs? Of zelfs alle drie? Wie zal het zeggen!
Too many links in comment is not allowed – spam check.
Second – English here. Ty.
Maar ik ben veel scherper in het Nederlands!!! En alle links zijn ook in het Nederlands. Bovendien, wie is er nou geinteresseerd in Degiro buiten de landsgrenzen? Ik beloof in het Engels te posten als het gaat om serieuze tenten als Optiver en IMC. I swear!
Oke mr “can’t express myself in English” , here we go:
1) Degiro invests all their profits in marketing. Without marketing they won’t lose many clients and the company will be then very profitable.
2) The hedgefund delivered over 50% return in 9 years. The volatility is far too high, and the target return not met, but profit = profit.
3) slick talk from Gijs is maybe an asset needed for any growing company. At the end of the day you need someone that sells the possibilities of the company.
If you are only interested in news of IMC/Optiver, then skip topics about Degiro or Binck.
1) In that case, how come Degiro posted a profit in Q1/Q2 2016 at all? They should have spent even more money on advertising! And why did Degiro seek money from the Hiq investors to fund their marketing? Since doing that, the marketing expenses have become an expense for those investors rather than for Degiro.
2) All of the 50% was made in the first two years when the Assets Under Management of Hiq were well below 10 million. It is easy to make a large % return against a small AUM with some standard non-scaleable arbitrage strategies. Honestly, if you think it was impressive to make 1 or 2 million a year in 2008/2009 with basic arbitrage, you are an idiot. Since then their return has been zero or negative. In absolute terms (that’s how IMC/Optiver count their profits you know?), Hiq have LOST more money for their investors than they have made. Those big losses came when AUM was near 100 million remember?. +100% on 10 million is +10 million. -25% on 100 million is -25 million. 10-25 = -15. Ouch. I’m sorry, but I really don’t see this “profit” that you speak of!
3) I understand that. Don’t you get it? I’m jealous of Gijs!
“Ouch. I’m sorry, but I really don’t see this “profit” that you speak of!”
It is not so difficult to see: you invest 10 euro in august 2007, and now it is worth (on paper) 15 euro. There is your 50%.
It is true that HiQ makes money easier when their AUM was smaller, that is why they wanted to raise marketing capital for Degiro to the expense of AUM of the fund. Less AUM for the fund (which is closed to new investors) = better results for the fund and for the investors who kept their money in the fund.
“you invest 10 euro in august 2007, and now it is worth (on paper) 15 euro. There is your 50%.”
And how many of the Hiq investors were there from the start in August 2007? The vast majority of their investors joined in 2012 or later and lost A LOT OF MONEY
What you’re saying is: “Nina Brink made money with Worldonline since she was there from the start.”
“Less AUM for the fund = better results for the fund and for the investors who kept their money in the fund.”
Wow, this is so slick, you must be Gijs! May I remind you that in the 2014 Due Diligence questionnaire (available on the Hiq website), Hiq was stating that their fund could handle AUM up to Eur 1 billion and that they expected to reach this target within a few years. after losing half of the money of investors and scaring them away suddenly “small is beatiful”. Ha ha ha, Gijs you are killing me! 🙂
really what you’re admitting is, Hiq is can’t return decent absolute profits.
But why the f*#k am I even discussing a 10 million euro “hedge fund” run by nobodies???
good question