FXCM (pre)-reports Q4 revenues to reassure investors

…following weak results posted by rival Gain Capital (Forex.com).

A very dramatic day in the FX world continued late Wednesday, when FXCM pre-reported its Revenues for Q4 and full-year 2011. FXCM will report its complete 2011 results in about two weeks’ time, on March 14. However, apparently prompted by Gain Capital’s just-released weak Q4 results, FXCM seemingly deemed it necessary to reassure the markets that things were different (i.e. better) at FXCM, and that no big negative surprises were in store.

As per the graph above, FXCM reported Q4 revenue of $105.2 million – still 4% lower than Q3, but 9% above last year’s Q4 figure. By contrast, Gain Capital yesterday reported Q4 revenue down 41% (!!) from Q3 and down 23% from Q4 last year, resulting in an EBITDA loss and Net loss for the quarter. FXCM also included volume figures for Q4 in its pre-release, but we had already seen and reported on those several weeks ago.

Gain’s Q4 miss announcement resulted in a 19% drop in its stock price on Wednesday to $5.24 (now 42% below its December 2010 IPO price), and also dragged down the shares of competitor FXCM, down 5% on Wednesday (and now 32% below its IPO price). However after pre-announcing its Q4 revenue figure after the equity markets closed on Wednesday in New York, FXCM shares rebounded in the aftermarket by nearly 6% (last we checked), more than reversing the day’s loss. Quite head-spinning activity indeed!

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