Siebert Financial Corp. (NASDAQ: SIEB), the holding company that offers discount brokerage services through its subsidiary Muriel Siebert & Co., signed a letter of intent with Overstock.com (NASDAQ: OSTK) to offer discount brokerage services through a portal on Overstock's website.
Continue Reading Below
Overstock said that the new service is expected to launch in the first quarter of 2018, and will offer $2.99 stock trades to all customers and special $1.99 commissions to its Club O loyalty members.
The market seems to like the news. Siebert Financial soared by as much as 42% on Monday and was up by 26% at 3 p.m. EST.
Overstock is a widely trusted brand name when it comes to all sorts of discount-oriented shopping, and has been trying to expand its reach. Most recently, Overstock has gotten into the automotive business with its "Cars by Overstock" platform. This is a logical addition to Overstock's platform to leverage its brand name into the discount brokerage business in partnership with a well-established firm.
Discount brokers and other financial products such as mutual funds and ETFs have been in a price-cutting war for some time. For example, TD Ameritrade recently chopped its standard commission from $9.99 to $6.99, and other major players in the industry have done the same.
Even so, the Siebert-Overstock platform's commission structure would undercut the vast majority of the financial services industry, and could give the companies a major competitive advantage while trying to get the new platform off the ground.
10 stocks we like better than Overstock.comWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Overstock.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of December 4, 2017