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The Reformed Broker

Will the Facebook IPO save online brokers?

Yet another group may benefit greatly from the Facebook IPO: brokerage firms.

By Guest blogger / May 18, 2012

A man stops to photograph Nasdaq in Times Square as Facebook has its IPO, Friday, May 18, 2012, in New York. According to some, the company's public offering could give online trading a boost.

Richard Drew/AP/File

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The online brokers need a hit record.  About as badly as Kelly Clarkson does right about now - one more shot of juice to keep things moving or else it's state fairs and Sears grand openings forever.

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Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.

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Brokerage firm equities trading has been a dead and dying business as the majority of investors yank money from portfolios and the more aggressive traders swim upstream (downstream?) to the options, futures and forex sites.

But the online brokerages are really excited today...

From MarketWatch:

“All of our customers are primarily going to trade the Facebook IPO in the secondary market...We’ll see lot of intraday trades; a lot of volatility. Customers will try to buy it at $65 and then jump out at $70 and then buy again if it goes back down.”

“It turns the light on in a dark room...It draws attention to the deal and the marketplace. People follow along and then look to the next deal.”

And from ValueWalk:

Ameritrade spokeswoman Beth Evegan said to MarketWatch, “IPOs drive trading volume for Main Street. Twenty-one percent of our clients that bought GM on the day of its IPO had not traded in three months. So one of the bright spots we observed was the IPOs bring about some re-engagement from retail investors who previously were sitting on the sidelines.”

Facebook IPO as economic stimulus for the online brokerage biz.  Adorable.

The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here.To add or view a comment on a guest blog, please go to the blogger's own site by clicking on www.thereformedbroker.com.

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