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Screenshot of a breaking news alert e-mail from Q2 2017
Gain Capital (and FXCM) shares continue to march upwards, even as insiders sell.
The capital markets seem to have fallen in love with the Retail Forex industry, and as Wall Street loves nothing more than a great momentum play it seems that (at least until now) nothing is going to slow it down.
In NYSE trading on Monday, Gain Capital (Forex.com) crossed above $10 for the first time, closing at $10.01. (Technically, Gain shares did cross the $10 line briefly mid-day in January 2011, the month after Gain Capital’s IPO, but never closed above that level).
Not to be outdone by its crosstown rival, FXCM scratched the $20 level on Monday, hitting its all-time high of $19.89 per share before settling back down to close at $19.70 — still its second highest closing price ever.
As its share price shot up last week, Gain Capital issued a terse ‘no comment’ press release after being contacted by the NYSE regarding the ‘unusual activity’ in Gain shares. Not surprising, as nothing other than positive momentum following Gain Capital’s blowout Q2 results continue to push Gain shares higher.
It should also not be surprising, nor necessarily viewed as a vote of no-confidence, that insiders at both Gain Capital and FXCM have been selling stock as the shares of both companies head upward. Directors and senior management at both companies get compensated, at least in part, with company stock and options, and many of these folks have held onto their shares the past few years as the markets ignored the two companies. With Wall Street suddenly interested, it is no surprise that some are cashing out, at least in part.
So who is selling, and how much? A lot! For example:
Gain Capital director Mark Gallant has pocketed a total of $2.2 million from share sales in August and September. Unfortunately (for him), he sold at prices in the $6.00-$7 .50 range, Had he waited a few weeks longer he would have made a lot more money.
At FXCM, the insider sales have been much larger:
- Director James Brown sold all of his shares, pocketing $15.6 million.
- FXCM Chief Dealer William Ahdout sold all his shares for $5.8 million.
- FXCM CFO Robert Lande sold most of his shares, taking home $2.6 million.
Data for above courtesy of SEC Form 4.
Nevertheless, the major players behind each of FXCM (CEO Drew Niv) and Gain Capital (CEO Glenn Stevens) continue to hold onto all of their shares, certainly showing confidence the ‘big boys’ have in the future of their companies.
Forex Industry Report