Interactive Brokers (IBKR) saw its stock price plunge 5.34% in after-hours trading on Wednesday, following two significant developments that rattled investor confidence in the online brokerage firm.
The primary catalyst for the sell-off was a regulatory filing revealing that Interactive Brokers' Founder and Chairman, Thomas Peterffy, had acquired a substantial 25.9% stake in conservative media outlet Newsmax. The stake, valued at over $6.2 billion and held through Conyers Investments, makes Peterffy the second-largest shareholder of Newsmax. This unexpected move into a politically oriented media investment raised concerns among investors about potential conflicts of interest and distractions from Interactive Brokers' core business.
Adding to the downward pressure, Citigroup analysts cut their price target for Interactive Brokers from $242 to $215. While the specific reasons for the downgrade were not immediately clear, such moves by major financial institutions often lead to short-term selling pressure as investors reassess their positions. The combination of these two factors likely contributed to the significant after-hours decline in IBKR's stock price, overshadowing the company's recent announcement of updates to its IBKR Desktop trading platform, which included multi-monitor support, new screeners, and overnight trading capabilities for US stocks and ETFs.
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