Shares of FX broker GAIN Capital rise 20% after posting Q3 results

Gain Capital

Shares of Retail and Institutional FX broker Gain Capital Holdings Inc (NYSE:GCAP) rose 20% on Friday, after the company reported its Q3 results after markets closed on Thursday evening.

GAIN shares closed the week at $7.35, up more than $1 from Thursday’s close of $6.14. This also represents GAIN Capital shares’ highest trading level since May.

The move happened on fairly high trading volume, with 3.2 million GCAP shares trading hands Friday versus average daily volume of 246,000 shares.

GAIN Capital operates the Retail FX brand, and the institutional GTX trading venue.

GAIN Capital’s Q3 results were not exactly spectacular, with fairly low volatility in currency markets during the summer months leading to a 17% Revenue decline from Q2, $81 million versus $98 million. One a year-to-year comparison, however, GAIN Revenues were up 13% over last year’s Q3.

On the bottom line, GAIN Capital reported a rare quarterly Net Loss in Q3, of $2.6 million, although that included a $4.9 million charge to earnings relating to the extinguishment of debt after GAIN Capital refinanced its convertible debt with a new $92 million offering during the quarter. On an EBITDA basis GAIN also had a strong quarter, reporting Adjusted EBITDA of $14.7 million, versus $13.1 million in the first two quarters of the year combined.

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