Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of retail options brokerage optionsXpress Holdings
So what: The all-stock deal values optionsXpress at $17.91 per share and represents a 17% premium to its Friday closing price. The booming popularity of options trading in the U.S. makes the move an obvious one for Schwab, especially considering that its option-trading customers are about six times as active and tend to be longer-standing than other clients.
Now what: The acquisition, in which each optionsXpress share will be exchanged for 1.02 shares of Schwab, is expected to close in the third quarter. Schwab sees $80 million in revenue and synergies arising from the deal, as well as a modest profit boost in the first year as a combined company. Of course, with the trend toward nontraditional asset classes likely to continue, the long-term upside that Schwab gains is what's most appealing.
Interested in more info on optionsXpress? Add it to your watchlist.
