Online trading companies TradeKing and Zecco announced recently that they intend to merge their two companies in an effort to create a larger alternative for investors who like the freedom to invest how they want to with limited fees.
I first started following Zecco when they first came onto the scene in 2006. At the time, they made a pretty big splash by offering $0 real-time trades. As many of the naysayers of the time predicted, that didn’t last long. They did manage to keep their fees fairly low, and TradeKing, as far as I know, has maintained a fair trading fee for it’s lifetime. I think it’s a bit interesting that the two are merging. There are, obviously, several online trading giants out there (talking babies anyone?) that they are competing with and if they remain separate, they can’t really compete. Together, they might be able to do so.
The challenge, with any merger like this, is to attempt to keep the investors from both companies happy. There will be people who like Zecco for certain reasons, and people who like TradeKing for certain reasons and just won’t like what the combined company is like. That happens with any merger, I think. But, keeping the number of people who actually jump ship to a different trader to a minimum will have to be their highest priority for the immediate future.
In the end, I can’t see any good reason why this won’t be good. The two companies are similar enough that the merger will eliminate a competitor for each and allow the new company to compete on a much larger scale.