10 August, AtoZForex.com, Lagos – It goes down as another historic day for FXCM, although to the negative. About four years ago, precisely in December 2010 going back memory lane, FXCM Inc (NYSE:FXCM). went public, listing on the New York stock exchange, with a share value of $14 per share. Just less than five years it is now seeing its share dip fall below $1, finding itself in the "Penny Stock" category for the first time since inception.
A drop of 17% in the FXCM share today has seen it go from $1.03 at close last week downward to $0.86.This will put FXCM in the category of the target of stock promoters and manipulators and if care isn't taken they will become a "Pump and Dump" scheme. Though, at the time of this report, FXCM stock has ricocheted, recouping close to 93 cents.
It is no quite clear that the recent asset sales embarked upon by the broker has been hitting the returns at FXCM, owing to the fact that the drop was made known a day after FXCM reported Q2 result. As it stands now, a return from asset sales is needed by the FXCM to meet up it demand to repay a rescue loan of $300 million from Leucadia National Corp (NYSE:LUK). The major draw back of the loan deal is its ever increasing punitive interest rate attached to it if it is not paid off as soon as possible.
Though, Penny Stocks dealers are not permitted to ply their trade on the NYSE which has a minimum share price of $1 as a requirement for all companies enlisted. FXCM's plan for a 1:10 reverse stock split amidst other reasons has afforded them the likelihood of being approved at a special shareholders meeting scheduled for September 21 later this year.
The firm got into this situation in the first place after the historic SNB event. This prompted the sale of its Japanese brand to Rakuten and the receipt of a $300 million rescue loan from Leucadia. According to the terms of the deal, FXCM needed to pay a sum of about $60 million by April 16th, a default of which could trigger an additional contingent financing fee of $30 million which was promptly met.
