FXCM Nasdaq delisting default risks - refinancing alternatives

Global Brokerage Inc posted significant net losses in Q1 2017, following FXCM Nasdaq delisting note. Today, we explore FXCM Nasdaq delisting default risks.

16 May, AtoZForex The Global Brokerage Inc., the company that owns 37.3 percent of FXCM Group LLC, has published its Q1 2017 results. The company has reported that its revenues have totaled at $45.9 million. This marks a 22 percent decline in comparison with the revenue of the first quarter of 2016.

FXCM Nasdaq delisting default risks

Global Brokerage’s net loss for the first three months of 2017 is amounting to $24.5 million. The same figure of the last year appeared at $61.9 million. Moreover, the number involves the changes and derivative gains and liabilities that are linked to the deal between FXCM Group LLC and Leucadia National.

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Just recently, the brokerage firm has lost the authority to operate in the US. The results of firm’s US operations have been named “discontinued operations” in the statement. The trading revenue from the discontinued operations for the first quarter totaled at $12.6 million. This figure is almost 30 percent lower than the one from last year. The net loss from discontinued operations in the Q1 of 2017 amounted for $5.4 million.

Moreover, the Global Brokerage has recently received a delisting notice by the Nasdaq Stock Market. The stock exchange has stated that for the last 30 consecutive days, the market value of Global Brokerage Inc’s shares was less than $15 million. This is not meeting the requirements for listing, as per Nasdaq’s listing rules.

Global Brokerage Inc to "explore refinancing alternatives"?

This notice has no direct impact on the company’s listing on Nasdaq or on the trading of the company’s common stock now. However, the market value of Global Brokerage’s publicly held shares must exceed $15 million for 10 straight days between now and October 30, 2017, in order to eliminate the chance of delisting. The company stated that the potential delisting “could lead to an event of default under the terms of our debt arrangement.”

According to the official announcement supplementing the earnings report:

“We believe that the potential delisting raises substantial doubt about our ability to continue as a going concern. We are working with financial and legal advisers to explore refinancing alternatives.”

Moreover, just today, the firm has announced that its CEO Drew Niv has left his position. Kenneth Grossman will be succeeding him as the next head of Global Brokerage.

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