On Thursday, global trading platform IG Group announced that it was acquiring Chicago-based tastytrade at apurchase price of $1 billion.
tastytrade operates a network of content that is meant to inform people about the ins and outs of investing in the stock market and equities. It provides eight hours of live video content every weekday as well as a library of free on-demand shows.
On top of this, tastytrade also is the owner of online brokerage platform tastyworks and mobile-centrictrading platformdough. These services offer commission-free trades geared toward everyday investors.
There’s a boom in demand right now for fintech companies that allow regular people to try their hand at investing in stocks. The stock market went on a wild ride last year, with the COVID-19 pandemic causing a steep decline in late February and March, and then a subsequent liftoff that seemed to defy the state of the larger U.S. economy. This helped drive a huge growth in consumer interest, as people who weren’t serious investors before started paying attention.
As a result, fintech platforms that offered commission-free or fractional share trading got a big boost. For example, trading platform Robinhood added millions of new users in 2020, and raised over $1 billion in funding to capitalize on that growth. IG’s $1 billion acquisition of tastytrade is just another sign of just how valuable this typeof fintech service has become.
It also speaks to how the investing scene is transforming. IG Group has been connecting tradersto markets since1974, so it’s been in the game for a long time. But investing was a lot different back then and not as accessible to the average person as it is now. By acquiring tastytrade, IG could be positioning itself in a way that would make it more relevant to this new breed of trader.
“tastytrade has grown impressively and proven itself to be an innovative market disrupter passionately committed to delivering for their clients. The financial and strategic rationale underpinning this deal are compelling. I am confident that, with our shared client centric ethos, passion for innovation and growth —IG and tastytrade will prove a winning combination,” IG Group CEOJune Felix said in a statement.
The management teams for both companies will stay the same following this acquisition. IG says the deal will be completed in the first quarter of its financial year.
“While our long-term goal has always been to go global, we waited almost 10 years until we found the right partner and perfect match,”tastytrade founder and co-CEO Tom Sosnoff said in a statement. “Together we will focus on empowering the self-directed investor and change the way people perceive and engage with financial markets.”
