Shares of the brokerage have soared yesterday after the company reiterated in its announcement that the Leucadia deal can be renegotiated.
If there was ever proof that the behavior of financial markets is irrational at times, it could be seen in the recent price action surrounding shares of NYSE traded FXCM Inc. The company’s shares soared in yesterday’s trading session by 50 per cent, after the firm merely reminded shareholders about its intentions going forward.
A buyback program that totaled $130 million has remained in play and the deal with Leucadia may be renegotiated after the repayment of the loan that FXCM was granted in January 2015 - these were the main takeaways from Friday’s statement that the brokerage issued through an SEC filing.
While nothing new has been provided to the market in terms of specific information, the mere mention was enough to force a huge short squeeze in shares of FXCM. The company’s stock has dropped about 53 per cent since the reverse stock split it announced in July to an all time low of $5.26 last Friday.
After the statement was issued, FXCM shares closed yesterday’s trading session higher by more than 52 per cent. A number of short positions have been squeezed out of the market causing a rally on virtually no news.
FXCM Inc Third Quarter Earnings Call Revisited
To delve deeper into the rationale of the move yesterday and to somewhat discourage further speculative interest in the company’s shares when it comes to testing lower grounds, one has to go no further than the third quarter earnings call transcript.
The company’s CEO Drew Niv repeatedly stated during the call that Leucadia and FXCM have been on good terms, with the former mentioning in October that it is very pleased with the partnership between the two. That in itself has not been a surprise, since Leucadia has stated that it almost tripled the investment that it made in FXCM in January.
What has been more crucial to the shareholders of FXCM though was the fact that its CEO stated at the time that the sale of the institutional business of FXCM will “materially improve” what the shareholders of the company are entitled to.
Institutional Business and Leucadia Loan Agreement
The institutional business of FXCM has been one of the key factors for the company to repay its loan to Leucadia National, and the management of the company has been reiterating it for a while.
While Drew Niv has refrained from mentioning any specifics about the matter, he has been clear that the sale of the institutional business of FXCM and the repayment of the loan to Leucadia itself would open the doors for the firm to renegotiate its agreement with its creditor.
Referring to the matter, Mr Niv said: “Those negotiations haven't even started and will not start until we pay the debt back and I don't want to give guidance and say that that's something to expect. What I can tell you is that we're focusing right now on putting the business in the best possible shape that we can and repaying the debt as fast as we can.”
In the end it will be the asset sales that will reshape the company’s profitability. Mr Niv explained during the third quarter earnings call: “As we simplify our operation by selling off institutional businesses, overhead for the core company essentially declines fairly substantially.”
As to the deal with Leucadia, Mr Niv shared an insight: “As we said before and what Leucadia said is they want to be long-term partners.”
With these nuggets of information, we are only left with pondering how soon FXCM will be able to sell its institutional business and repay its loan to Leucadia National.
If there was ever proof that the behavior of financial markets is irrational at times, it could be seen in the recent price action surrounding shares of NYSE traded FXCM Inc. The company’s shares soared in yesterday’s trading session by 50 per cent, after the firm merely reminded shareholders about its intentions going forward.
A buyback program that totaled $130 million has remained in play and the deal with Leucadia may be renegotiated after the repayment of the loan that FXCM was granted in January 2015 - these were the main takeaways from Friday’s statement that the brokerage issued through an SEC filing.
While nothing new has been provided to the market in terms of specific information, the mere mention was enough to force a huge short squeeze in shares of FXCM. The company’s stock has dropped about 53 per cent since the reverse stock split it announced in July to an all time low of $5.26 last Friday.
After the statement was issued, FXCM shares closed yesterday’s trading session higher by more than 52 per cent. A number of short positions have been squeezed out of the market causing a rally on virtually no news.
FXCM Inc Third Quarter Earnings Call Revisited
To delve deeper into the rationale of the move yesterday and to somewhat discourage further speculative interest in the company’s shares when it comes to testing lower grounds, one has to go no further than the third quarter earnings call transcript.
The company’s CEO Drew Niv repeatedly stated during the call that Leucadia and FXCM have been on good terms, with the former mentioning in October that it is very pleased with the partnership between the two. That in itself has not been a surprise, since Leucadia has stated that it almost tripled the investment that it made in FXCM in January.
What has been more crucial to the shareholders of FXCM though was the fact that its CEO stated at the time that the sale of the institutional business of FXCM will “materially improve” what the shareholders of the company are entitled to.
Institutional Business and Leucadia Loan Agreement
The institutional business of FXCM has been one of the key factors for the company to repay its loan to Leucadia National, and the management of the company has been reiterating it for a while.
While Drew Niv has refrained from mentioning any specifics about the matter, he has been clear that the sale of the institutional business of FXCM and the repayment of the loan to Leucadia itself would open the doors for the firm to renegotiate its agreement with its creditor.
Referring to the matter, Mr Niv said: “Those negotiations haven't even started and will not start until we pay the debt back and I don't want to give guidance and say that that's something to expect. What I can tell you is that we're focusing right now on putting the business in the best possible shape that we can and repaying the debt as fast as we can.”
In the end it will be the asset sales that will reshape the company’s profitability. Mr Niv explained during the third quarter earnings call: “As we simplify our operation by selling off institutional businesses, overhead for the core company essentially declines fairly substantially.”
As to the deal with Leucadia, Mr Niv shared an insight: “As we said before and what Leucadia said is they want to be long-term partners.”
With these nuggets of information, we are only left with pondering how soon FXCM will be able to sell its institutional business and repay its loan to Leucadia National.
Cheetah Fund Investors Lose $9 Million in Alleged Fraudulent Scheme
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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