Following disappointing Q4 2011 report Gain's stock tumbles almost 20%
Following yesterday’s disappointing full 2011 year and Q4 2011 report Gain’s stock today took a beating and dropped almost 20%.
Following yesterday’s disappointing full 2011 year and Q4 2011 report Gain’s stock today took a beating and dropped almost 20%. FXCM which didn’t report yet was too affected as investors expect it to present similarly disappointing results and dropped 5%.
Gain reported a $3.3 million EBITDA loss in Q4 2011 and significant drop in revenue while the whole 2011 year showed a slight 4% decrease in Net Revenue comparing to 2010. Gain did show impressive growth in retail forex trading volume +18.8%, +298.5% growth in institutional forex volume and 20.9% growth in client assets. Wall Street investors who only care about the bottom line were clearly unimpressed.
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With current market cap of just $180 million Gain Capital the owner of the lucrative (and very SEO friendly) forex.com domain is becoming a very attractive target to bargain hunters. The usual rumors in the market have that Gain may soon be acquired and point at the usual suspect(s) – this however may still be some time away.
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Nice article, almost. But there are some Kludge inferences made by you. 1.”Gain did show impressive growth in retail forex trading volume +18.8%”, Higher growth in volume with lower returns is not impressive it is akin to losing on every deal and making it up on the volume. 2. +298.5% growth in institutional forex volume, Starting from essentially zero this is misleading. 3. As for a white knight, at 5.25, even a 25% premium gets you to a takeout price of 6.55 a far cry from the lofty pre-ipo valuations. Long term investors and insiders cannot and should not be… Read more »
Nice article, almost. But there are some Kludge inferences made by you. 1.”Gain did show impressive growth in retail forex trading volume +18.8%”, Higher growth in volume with lower returns is not impressive it is akin to losing on every deal and making it up on the volume. 2. +298.5% growth in institutional forex volume, Starting from essentially zero this is misleading. 3. As for a white knight, at 5.25, even a 25% premium gets you to a takeout price of 6.55 a far cry from the lofty pre-ipo valuations. Long term investors and insiders cannot and should not be… Read more »
My apologies, I in no way intended this banter to be vituperative. My point was the mismanagement by Gain. It is no secret that for most online firms the best decision they made is opening the doors, FXCM & Saxo being the exception. There appears to be tectonic shifts taking place in the retail/online landscape and the firms with true leadership and vision are putting distance between themselves and the pretenders. This is not to say the pretenders are not wildly profitable. If Gain is hanging its hat on GTX, as former bank dealers and brokers they should know how… Read more »
well, it’s the old debate whether to sell knives or not. at the end people make their choices and these are just tools which can be turned against traders or not
well, it’s the old debate whether to sell knives or not. at the end people make their choices and these are just tools which can be turned against traders or not
My apologies, I in no way intended this banter to be vituperative. My point was the mismanagement by Gain. It is no secret that for most online firms the best decision they made is opening the doors, FXCM & Saxo being the exception. There appears to be tectonic shifts taking place in the retail/online landscape and the firms with true leadership and vision are putting distance between themselves and the pretenders. This is not to say the pretenders are not wildly profitable. If Gain is hanging its hat on GTX, as former bank dealers and brokers they should know how… Read more »
True on the ownership, FXCM insiders very much drive growth. FXCM was never shy about raising capital to drive growth, Gain could barely get off its IPO after a few attempts, and at a awful price, which had insiders in a uproar. Semantics, but there is no lack of management at Gain, a dearth of leadership. I would proffer the real difference b/w the 2 firms is their respective models. If you are going to take on the risk you have to know how to manage it, otherwise it is best to avoid the headaches associated with a large one… Read more »
True on the ownership, FXCM insiders very much drive growth. FXCM was never shy about raising capital to drive growth, Gain could barely get off its IPO after a few attempts, and at a awful price, which had insiders in a uproar. Semantics, but there is no lack of management at Gain, a dearth of leadership. I would proffer the real difference b/w the 2 firms is their respective models. If you are going to take on the risk you have to know how to manage it, otherwise it is best to avoid the headaches associated with a large one… Read more »
I don’t think I adequately addressed this statement; 1.$1 trillion in institutional volume is ‘essentially zero’? really? Yes zero. As I understand it GTX had begun trading mid 2010, Hence the term starting, so the percentage gain is misleading as it is probably based on half of a year, the first half of existence is usually a light time in terms of total trading which adds to the obfuscation. A bit like early season baseball averages. You don’t expect the players batting .500 after the first week of playing to maintain that average? So to show a large percentage gain… Read more »
I don’t think I adequately addressed this statement; 1.$1 trillion in institutional volume is ‘essentially zero’? really? Yes zero. As I understand it GTX had begun trading mid 2010, Hence the term starting, so the percentage gain is misleading as it is probably based on half of a year, the first half of existence is usually a light time in terms of total trading which adds to the obfuscation. A bit like early season baseball averages. You don’t expect the players batting .500 after the first week of playing to maintain that average? So to show a large percentage gain… Read more »