TD Ameritrade Announces Secondary Offering of 27.68M Shares

December 13, 2017 — 11:15 AM EST

TD Ameritrade, the Omaha, Nebraska-based online brokerage, said late Tuesday that it has launched an underwritten secondary offering of 27.68 million shares held by the Rodger O. Riney Family Voting Trust, the Paula and Rodger Riney Foundation and the St. Louis Community Foundation.

In a press release, TD AmeritradeĀ Holding Corporation (AMTD) said that the three entities have agreed to sell their combined 27.68 million shares in an underwritten secondary offering. Previously, the brokerage had given the Riney Trust the 27.68 million shares in connection with its acquisition of Scottrade Financial Services, which closed in September. The Riney Trust then transferred 4.54 million shares to Rodger Riney, who in turn transferred 2.54 million shares to the Paula and Rodger Riney Foundation and 2 million shares to the St. Louis Community Foundation. All of the shares will be sold in the offering, which is being handled by The Goldman Sachs Group, Inc. (GS).

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The shares represent about 4.9% of TD Ameritrade's outstanding shares of common stock as of Nov. 2. Once the secondary offering is complete, the selling shareholders won't own any stock of TD Ameritrade. The discount brokerage is not selling any shares, nor will it receive any proceeds from the transaction. The secondary offering comes as TD Ameritrade's share price has been gaining all year, buoyed by the potential for tax reform that would benefit all sorts of corporations and a stock market that has been high flying all year. Shares are up more than 10% so far in 2017, although the stock was recently trading down 2%, or $1.07, to $51.62 a share.

With stocks setting new highs seemingly every month, online brokerages, including TD Ameritrade, are seeing brisk business from all sorts of investors. For the month of October, the brokerage reported that clients made an average of 680,000 trades each day, which marks a 55% increase from a year ago and a 19% increase from September. Meanwhile, total client assets hit $1.14 trillion at the end of October, up 49% from last year and 2% from September. The company also said that average spread-based balances increased 31% from last year and 14% from September to $150.9 billion, while the average fee-based balance increased 29% from last October and 5% from September to $217.7 billion.