Canaccord Genuity Morning Coffee on Charles Schwab (SCHW) and OptionsXpress (OXPS): An Attractive Option
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Price: $75.23 +1.31%
Rating Summary:
17 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
Rating Summary:
17 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 11 | New: 13
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Canaccord Genuity Morning Coffee on Charles Schwab (Nasdaq: SCHW) and OptionsXpress (Nasdaq: OXPS): An attractive option.
Canaccord analyst says, "Charles Schwab said it will buy options trading company OptionsXpress Holdings in an all-stock deal valued at about $1 billion. Under the terms of the deal, OptionsXpress shareholders will get 1.02 shares of Schwab stock in exchange for each OptionsXpress share. That values OptionsXpress at $17.91 a share, roughly a 17% premium based on Friday’s closing prices. The buyout comes at a time when derivative volumes and profits have remained strong, and were credited as one of the key drivers of Deutsche Boerse AG’s $10-billion deal for NYSE Euronext (NYSE: NYX). Indeed, the U.S. options market where OptionsXpress is best known has seen robust growth of late. The company said last week that retail trading in February hit its highest level since October 2008, mirroring the market as a whole as it saw the biggest monthly volume jump in over two years. Schwab is best known as a brokerage for long-term investors, but Chief Financial Officer Joseph Martinetto said on a conference call with analysts that Schwab customers who trade options are “our most economically valuable clients.” He predicted that the company’s daily average trades metric would increase dramatically, driving increased trading revenue for the firm. Schwab’s Chief Executive Walt Bettinger said the company doesn’t “have any plans right now to take away the OptionsXpress platform” at this time, and instead will keep operating both technologies. The deal is expected to close in the third quarter, and carries a break-fee of $40 million."
Canaccord analyst says, "Charles Schwab said it will buy options trading company OptionsXpress Holdings in an all-stock deal valued at about $1 billion. Under the terms of the deal, OptionsXpress shareholders will get 1.02 shares of Schwab stock in exchange for each OptionsXpress share. That values OptionsXpress at $17.91 a share, roughly a 17% premium based on Friday’s closing prices. The buyout comes at a time when derivative volumes and profits have remained strong, and were credited as one of the key drivers of Deutsche Boerse AG’s $10-billion deal for NYSE Euronext (NYSE: NYX). Indeed, the U.S. options market where OptionsXpress is best known has seen robust growth of late. The company said last week that retail trading in February hit its highest level since October 2008, mirroring the market as a whole as it saw the biggest monthly volume jump in over two years. Schwab is best known as a brokerage for long-term investors, but Chief Financial Officer Joseph Martinetto said on a conference call with analysts that Schwab customers who trade options are “our most economically valuable clients.” He predicted that the company’s daily average trades metric would increase dramatically, driving increased trading revenue for the firm. Schwab’s Chief Executive Walt Bettinger said the company doesn’t “have any plans right now to take away the OptionsXpress platform” at this time, and instead will keep operating both technologies. The deal is expected to close in the third quarter, and carries a break-fee of $40 million."
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