It was a fairly good week for shares of retail forex brokers. (At least for some of them).
Hottest of the group was FXCM Inc (NYSE:FXCM), which saw speculation heat up again regarding its ability to seal a deal with Leucadia National Corp (NYSE:LUK) and renegotiate terms of its $300 million loan from Leucadia. FXCM shares were up more than 28% for the week ended March 4, that despite being down 6% on Friday. FXCM shares began the week at $12.04, and ended the week at $15.42.
FXCM is reporting its Q4 and full year 2015 results later this coming week, but we don’t think that is really a factor in the action in FXCM stock. As was exclusively reported on LeapRate in late February, Leucadia finally confirmed that it is indeed (re-) negotiating terms of the loan with FXCM, which stood at about $193 million at year-end 2015. FXCM had indicated that negotiations were taking place as far back as December. And as we have stated before, it is FXCM’s ability to reacquire the upside in its shares for its own shareholders which has shareholders somewhat bullish.
The other retail forex stock we mentioned, London-listed Plus500 Ltd (LON:PLUS), has seen a very steady climb upward in its share price since its acquisition for £4 per share by Playtech PLC (LON:PTEC) was called off in November. Plus500 shares have climbed since more than 50%. Plus500’s Friday close of £6.18 is the company’s highest share price since last May, and gives the company a market valuation of more than $1 billion. Plus500’s all-time share price high of £7.81 is now not too far off.
What will this week bring? Stay tuned to LeapRate for complete coverage of the retail forex sector.