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Schwab buys firm, cuts fee
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February 2, 2000: 9:44 a.m. ET
Acquires CyBerCorp trading company; halves commissions for active traders
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NEW YORK (CNNfn) - Charles Schwab Corp. has acquired electronic trading firm CyBerCorp for $488 million in stock and plans to reduce commission fees for its most active users, the brokerage firm announced Wednesday.
Terms of the acquisition call for Schwab to exchange roughly 13.7 million unregistered shares of Schwab common stock for all outstanding shares, options and equity rights of closely held CyBerCorp. Based on Schwab's Monday closing price, the transaction amounts to approximately $488 million in stock.
Both companies' boards have approved the acquisition, and it is expected to close in the first quarter of this year. CyBerCorp founder Philip Berber and Greg Ferris will continue as co-chairmen of the company. Jim Hackley, Schwab's executive vice president, retail client services has been tapped as chief executive of the subsidiary.
Austin, Texas-based CyBerCorp's customers generated 19,000 average revenue trades in December. In last year's third quarter, its trading volumes propelled it to the Top 10 online brokers ranked by Hambrecht & Quist. For 1999, total revenue equaled $25 million, a 350 percent jump over 1998, and its after-tax margin for the year exceeded 16 percent.
Schwab's (SCH: Research, Estimates) reduced pricing for online equity commissions is aimed at its most active retail customers, and will drop to $14.95 from $29.95 when more than 60 "qualifying" trades are made in a quarter. Commissions drop less, to $19.95, when customers exceed 30 qualifying trades per quarter.
Customers must have $50,000 in household assets at Schwab to qualify for the new pricing.
Schwab shares finished Tuesday at 35-1/2, down 1/4. 
--from staff and wire reports
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