Shares of Global Brokerage Inc (NASDAQ:GLBR) continued their slide into oblivion late last week, with GLBR down another 30% on Friday after US trading continued following the one day Thanksgiving break.
After initially barely reacting following the announced plans of the company two weeks ago to reorganize under Chapter 11, Global Brokerage – which owns 50% of FXCM Group – saw its shares remain fairly stable at about $1.30.
The reorganization plans is mainly an agreement with the company’s convertible bondholders, due more than $172 million, to amend the terms of the bonds to become non-convertible, raise their interest rate from 2.25% to 7%, and (most importantly) extend their maturity by five years. Other than the higher coupon payments, GLBR shareholders didn’t really give up much in the reorg plan, which still needs to be formally approved by both the company’s shareholders and the noteholders.
However given a few more days to contemplate things, GLBR shareholders are clearly hitting the “sell” button. The shares hit an all-time low of 38 cents before closing at 41 cents on Friday – down about 68% from when the plan was first announced.
We’d remind LeapRate readers that GLBR (when it was known as FXCM Inc.) did a 10:1 reverse split of its shares back in late 2015 – meaning that relative to its 2010 IPO price of $14, the shares are “really” now at under 5 cents.
Interestingly, as GLBR shares were tumbling, FXCM rival Forex.com saw its parent company’s shares soaring on higher-than-normal volumes Friday. Gain Capital Holdings Inc (NYSE:GCAP), which owns Forex.com as well as the institutional FX brand GTX, saw its shares rise 14% on Friday with no news being announced. At $8.33, Gain Capital shares are at their highest level since early April. Gain shares have risen by 36% since reporting strong Q3 financial results at the end of October.