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.