de | cn | ru

Brokers News

FXCM's Next Big Deal to Happen before June 2014?

Yesterday FXCM, the major US Forex broker, published a set of metrics that were far from showcase ones and the conference call following the publication shed some light on the factors behind the performance.  These included subdued volatility that has led to lower trading volumes, as both FXCM's chief executive Drew Niv and chief financial officer Robert Lande said. In such an environment, the company is pressing with acquisitions and here is what the conference call had revealed about the next acquisition in the pipeline.


Was the third-quarter really that bad?

Indeed, the net revenues for the third quarter fell by 1% year-on-year to $113.2 million, while the net income (adjusted pro forma) dropped 22% to $9.7 million. But the latter result is not so dismal given the $4.7 million in net profit generated by, the US Forex rival. 
We've already mentioned lower volumes as a crucial factor for the drop in revenues and profits: for example, retail average daily volumes were down by 16% in the third quarter against the second quarter. But is this result so poor indeed? Well, in fact the third-quarter results surpass those from any quarter apart from the first quarter of 2012.
The point here is not to draw any drastic conclusions about the performance of a company given some results that could be meager temporary blips. But, of course, business does not tolerate negligence of any data and FXCM has been seeking alternative sources of income to shield the effects of lower volatility (and volumes).

The M&A Push

In response to the lower trading activity, FXCM has undertaken a push into acquisitions – it's as simple as this: favorable trading conditions allow the broker to deliver robust organic growth, while weak conditions drive the company to expand via acquisitions. The broker pursued three acquisitions in the third quarter: it took over the retail accounts of Alpari US, acquired 50.1% stake in Forex intelligence expert Faros Trading and a $12-million note in Infinium Capital
As both Drew Niv and Robert Lande stressed during the conference call, the broker is well-placed to keep up with the M&A push thanks to a strong balance sheet. We are talking about $638 million in shareholder equity, $421.9 million of own cash and a $155 million credit facility.
The question that looms is what will be the next acquisition target?

The Next Big Deal

During the conference call, Drew Niv labeled the transactions during the third quarter as “small” and said that there are plans about a bigger deal. Despite the fact that two of the acquisitions in the third quarter were of institutional nature, FXCM's CEO was adamant that the next deal would be in the retail Forex sector. The broker has even imposed a deadline for the clinching of such a deal – June 2014. If the purchase does not become a fact by this deadline and the trading conditions do not improve, then the company would rather pursue a share buyback. 

The What Ifs

Of course, there are a bunch of factors that could hamper a deal – pricing, for example. Another issue to which Niv pointed are regulations, as all deals should be concluded having in mind net capital requirements and reporting rules. Of course, the broker is keeping an eye on those and would hardly allow disturbances of this essence. 
All we have to do is wait for several months to see how the plans of FXCM materialize.

About FXCM Inc. 

FXCM Inc. (NYSE:FXCM) is a global online provider of foreign exchange, or FX, trading and related services to retail and institutional customers world-wide. 
At the heart of FXCM's client offering is No Dealing Desk FX trading. Clients benefit from FXCM's large network of forex liquidity providers enabling FXCM to offer competitive spreads on major currency pairs. Clients have the advantage of mobile trading, one-click order execution and trading from real-time charts. FXCM's U.K. subsidiary, Forex Capital Markets Limited, offers Contract for Difference ("CFD") products with no re-quote trading and allows clients to trade oil, gold, silver and stock indices along with FX on one platform. In addition, FXCM offers educational courses on FX trading and provides free news and market research through 
TAGS: fxcm  fxcm forex broker  fxcm us broker  fxcm acquisitions  mergers and acquisitions  forex m&a  corporate strategy  forex deals  retail forex  institutional forex  june 2014 

More news about FXCM

Broker Country Regulation Platform Min Deposit Review
$50 Review Website
US NFA, CFTC MT4 $250 Review Website
Cyprus, UK, Mauritius CySec, FCA, FSC MT4, MT5, Web $10 Review Website
Australia, Cyprus ASIC MT4, MT5,
$100 Review Website
UK, Cyprus, Australia FCA, CySec, ASIC MT4, MT5 $5 Review Website
UK, Australia, South Africa FCA, ASIC, FSCA MT4, Trading
$50 Review Website
UK, Cyprus, UAE, South Africa FCA, CySEC, DFSA, FSB MT4, MT5, FxPro
$100 Review Website
Cyprus CySEC MT4, MT5, Web $1 Review Website
Belize IFSC MT4, MT5 $100 Review Website
Cyprus, UK, South Africa, UAE CySec, FCA, FSCA, DFSA MT4, MT5, Web $5 Review Website
Cyprus, UK CySEC, FCA MT4, MT5 $1 Review Website
UK FCA MT4, Web, MT4
for Mac
$100 Review Website
Australia, UK ASIC, FCA MT4, MT5,
$200 Review Website

More Forex Brokers News

XM parent actively prepares for the launch of its US brand

Jul 03 2019 14:19:28

  Trading Point Group, the owner and operator of the XM brand, actively prepares for the future launch of its US brand Read more

FBS Invites 20 Best Partners To a VIP Party

Jul 02 2019 15:04:24

Partner parties is a great way to get to know company’s local promoters and celebrate loyalty, motivation, and cooperation. In 2019, FBS broker launches the FBS Stars contest with a round trip flight to Russia’s second largest city and a VIP party invitation as a prize. Read more

Vantage Prime will no longer service non-Australian clients

May 20 2019 13:36:39

  Vantage Prime, which is a part of the Vantage FX group, announced it will no longer service non-Australian clients, online media Finance Magnates reported today. The broker’s decision is taken due to regulatory concerns. Read more

Dukascopy warns it has no cooperation with shady broker GCG Asia

May 16 2019 13:29:47

  Swiss forex brokerage and bank Dukascopy has repeatedly warned investors that it is has no cooperation Guardian Capital Asia (GCG Asia) and that the latter is likely involved in a fraudulent scheme. Read more

$75 mln forex Ponzi scam revealed in the US

May 03 2019 16:46:08

The Commodity Futures Trading Commission (CFTC) in the US has filed charges against Florida based Oasis International Group, Oasis Management and Satellite Holdings along with their owners for running a 75 million USD Ponzi scheme, concealed as forex investment program. Read more

Australians lost $86 mln to investment scams in 2018

May 02 2019 17:04:18

Australians lost over 86 million USD to investment scams in 2018 alone – the biggest portion of the almost 490 million USD  in losses from over 378 000 scam reports, the latest report of the Australian Competition and Consumer Commission’s (ACCC) reveals. Read more

FXTM now offers a deposit bonus of up to $5 000

Apr 25 2019 11:10:24

  Global award-winning brokerage FXTM has launched their biggest deposit bonus promotion ever. The broker is now offering an extra 30% back from every amount their traders deposit over a period of 30 days, up to a total of $5,000. Read more

FXTM appoints Han Tan as a Market Analyst for Southeast Asia region

Apr 19 2019 13:28:36

  Global award-winning forex broker FXTM has just announced the appointment of Tan Chung Han (Han Tan) as a Market Analyst. Read more

FXTM gets a license from Mauritius’ FSC

Mar 28 2019 09:59:36

  Award-winning forex brokerage  FXTM (ForexTime) continues its ongoing global expansion. The broker announced it has acquired a license from the Financial Services Commission (FSC) of the Republic of Mauritius previous week. Read more

Fortrade is the first broker to get an ASIC license in nearly 2 years

Mar 20 2019 15:03:35

  Fortrade acquired a financial services license from the Australian Securities and Investments Commission (ASIC), which hasn’t been very welcoming of new retail forex broker applicants lately. Read more

de | cn | ru