LaBranche (NYSE: LAB) is one of the largest floor trading specialists on the New York Stock Exchange. While this used to be a prestigious and lucrative role in day-to-day trading, the importance of humans in trading continues to decrease with time.. As a result of this technological progress, LaBranche's business results have grown weaker in the last several years.
While LaBranche has seemingly done little in the last few years to prevent being "stuck in the old age", yesterday the company issued a
press release regarding the future of the company. According to the PR, the company was able to sell its AMEX specialist business to Cohen Specialists, an announcement that came with an indication that LaBranche would report a loss on the sale. In addition, the company's board of directors has obtained two investment banks to explore "strategic alternatives" for the company. While this is very popular language on Wall St., I'm not sure if I'd think much of it because this is a level playing field: everyone following the recent activity and advancements in exchange technology knows and understands that the role of the specialist in trading is declining. I don't see why any buyer would pay significant money for this business unless, of course, the company can make advancements into the electronic trading space or the more lucrative trading of derivatives, futures, and the like.
In my opinion, I don't think the buzzwords "strategic alternatives" justify a buy in this one.
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