EXCLUSIVE: Sterne Agee CRT Says It'd Be Hard To Value FXCM Over $5; CEO 'Can't Explain' Stock Increase
Shares of FXCM Inc (NYSE: FXCM) have had quite a run-up this week. After trading under $10 for the better part of the last six months, the stock has ripped to over $21 since December 28.
"The stock, which has a moderate but not overly high 8 percent of its float short, last hit the $15 range in June (by split-adjusted prices)," Benzinga pointed out on Monday. "Of note, shares booked a similarly impressive one-day gain of 50 percent on December 14, shortly after FXCM reaffirmed its $130 million buyback program and said it was still "committed" to restructuring its bailout agreement with Leucadia National Corp."
A few days later, FXCM Director Ryan Silverman bought 21,000 shares.
Sterne Agee CRT Analyst: It'd Be Hard To Value FXCM Over $5
Speaking with Benzinga on Wednesday, Sterne Agee CRT analyst Kevin Starke said it would be hard to value FXCM over $5. The analyst is unsure of a driving force behind its recent gains and said clients have been trying to cover.
FXCM couldn't be buying its own shares, as it would be in breach of term agreement on loan to buy their own stock. The company said in a press release that it would buyback shares, however, Starke says this is misleading given the term loan agreements.
Separately, FXCM CEO Drew Niv told Benzinga in an email that the press release put out a few weeks ago was last relevant news. "Nothing has happened since. I can't explain any of this," he said.
Shares of FXCM were up another 10 percent Wednesday morning, hitting a high of $24.77. Shares began to selloff late in the morning, recently trading at $21.79. Update: Shares closed at $18.45, down 6.8 percent on the day.
Over the past two days, the volume has been around six million shares compared to its 20-day average of 1.6 million shares. The issue is on pace to have another high volume day as 3.1 million shares have already changed hands with less than five hours remaining in the session.
Garrett Cook and Jason Shubnell contributed to this report.
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Latest Ratings for FXCM
|May 2015||Keefe Bruyette & Woods||Maintains||Underperform|
|Mar 2015||Keefe Bruyette & Woods||Downgrades||Market Perform||Underperform|
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