Not a proud day in the history of FXCM Inc (NYSE:FXCM).
The venerable retail forex broker, which went public in December 2010 at $14 per share, saw its shares dip below $1.00 for the first time into ‘penny stock’ territory.
FXCM shares dropped 17% at open today, down from $1.03 all the way to $0.86. At the time of writing, FXCM stock recovered somewhat up to 93 cents.
The drop comes the day after FXCM reported Q2 results which confirmed that asset sales have been hitting revenues at FXCM. FXCM needs the proceeds of asset sales to repay a $300 million rescue loan from Leucadia National Corp (NYSE:LUK), which carries increasingly punitive interest expense if not paid off quickly.
More than just a moniker, penny stocks are not allowed to trade on the NYSE, which has a minimum $1 share price requirement for all listed companies. For this reason, among others, FXCM initiated plans for a 1:10 reverse stock split, to be approved at a Special Shareholders Meeting planned for September 21.