Don’t expect private equity to bid for TradeKing, an online broker known for charging low fees that’s up for sale, three banking sources said.
Bank of America Corp. is advising on the auction, the people said. Fort Lauderdale, Florida-based TradeKing is seeking bids of $300 million, the people said.
TradeKing produces $10 million EBITDA, the people said. TradeKing’s business is “challenged” and doesn’t produce a “ton of growth or profitability,” one of the people, a banker, said. TradeKing charges investors a flat rate of $4.95 per stock trade and doesn’t require a minimum account balance, said Bloomberg News, which reported the auction Thursday.
Sources doubted whether other online firms like TD Ameritrade, E*Trade or Charles Schwab Corp. would be interested in TradeKing. Private equity is even less likely, the people said.
However, a separate, fourth source disagreed and said a surging M&A market may help TradeKing find a buyer. “Private equity money is eager to go to work in fintech,” the source said.
Founded in 2005, TradeKing raised $5 million that year from investors such as OCA Ventures, according to data from CB Insights. TradeKing collected another $6 million in 2006 from investors including Battery Ventures, CB Insights said. Other investors include Velocity Capital B.V. and The Quick Family, a TradeKing factsheet said.
TradeKing closed its buy of MB Trading in November. In 2012, TradeKing merged with Zecco, a San Francisco-based online broker.
Executives for TradeKing declined comment. BofA, Velocity Capital, OCA Ventures and Battery Ventures could not immediately be reached for comment.
Action Item: To contact TradeKing call (877) 495-5464
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