What Does FXCM Management Know That Investors Don’t?
TipRanks | Mar 15, 2015 11:29AM ET
Shares of FXCM (NYSE:FXCM) shot up 6.5% in after-hours trading on Thursday, March 12th after the company announced its fourth quarter earnings and updated investors on efforts to repay Leucadia National Corporation (NYSE:LUK). This 6.5% increase comes as a welcomed surprise as FXCM was almost completely liquidated earlier this year when the Swiss National Bank abandoned their franc cap.
On January 15, the Swiss National Bank abruptly ended its franc cap that regulated the difference between the Swiss franc and the euro; a policy that had been in practice since the summer of 2011. As a result, the stock dropped nearly 90% and “caused a flash crash that lead to historic dysfunction never seen before in the FX markets,” according to an FXCM press release dated March 11th. Many believed that FXCM would not have the capital to resume normal operations, but the foreign exchange market received $300 million in cash from Leucadia to keep FXCM afloat. FXCM has already repaid $12 million of the rescue package
FXCM finally received some good news last week when the company’s fourth quarter report beat Wall Street’s expectations this week. Highlights from the report include earnings of $0.35 a share, beating analysts’ consensus of $0.17 earnings per share and marking a 337.5% increase on a year-over-year basis.The company posted revenue of $134.7 million, up 18% from the same quarter a year prior.
On March 12th, Citigroup (NYSE:C) analyst
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