The Wall Street Journal is reporting that Cyprus-based Retail Forex broker IronFX is already in the advanced stages of going public in the US early next year, in an IPO which could value the company at about $800 million.
The IPO would value IronFX at more than twice the valuation of Gain Capital (NYSE:GCAP), which has a current market cap of about $330 million, but less than FXCM (NYSE:FXCM), which is valued now at about $1.4 billion. (The WSJ article got FXCM’s valuation wrong, they had FXCM at $790 million, a common mistake made since much of FXCM’s stock is in the form of Units held by some of the initial founders and investors).
The WSJ states that IronFX has engaged leading investment banks Barclays, UBS, Credit Suisse as its underwriters for the planned offering.
We believe that many in the FX industry have pegged IronFX’s volumes too low, not realizing how much they have grown over the past three years. We believe that IronFX is indeed among the top 10 CFD brokers worldwide (ex Japan) by volume, up there with the likes of FXCM, Saxo Bank, IG, FxPro, EXNESS, Plus500, Swissquote and a few others. The company has invested heavily in research (lead analyst Marshall Gittler and his ubiquitous bow tie are a staple on financial TV), and in sponsorships, such as IronFX’s partnership with leading soccer club Barcelona FC, home of Lionel Messi and friends. IronFX has about 1,600 employees worldwide.
A little-known wrinkle of US securities laws allows foreign companies looking to list on a US exchange (such as the NYSE or NASDAQ) to make confidential filings with the Securities and Exchange Commission (or SEC), basically clearing their IPO prospectus with regulators before ‘going public’ formally with news of the planned IPO. The WSJ reports that this has happened in this case as well, with IronFX already having filed their preliminary documents with US regulators, paving the way for an early 2015 IPO.
The last CFD broker IPO, that of Plus500 (LON:PLUS), was a big success, with the shares having more than quadrupled since going public in mid 2013. The Plus500 IPO was done on the London Stock Exchange’s AIM market.
We’ll bring you more on the IronFX IPO as this story develops.