FXCM shares continue post Q1 results dive, down 19%

Shares of retail forex broker FXCM Inc (NYSE:FXCM) continue to head south, following Q1 financial results which apparently both confused and disappointed investors.

Interestingly, leading up to FXCM’s Q1 results announcement last Friday FXCM shares traded up nicely – up 18% on Friday.

But that optimism dissipated quickly once investors had the weekend to contemplate the results, and in the three trading days since FXCM has dropped 19% to close Wednesday at $1.75, its lowest closing price since right after the January 15 Swiss Franc spike.

In pre-market trading Thursday, FXCM shares were down a further 2% to $1.71.

FXCM share price May 14

As we explained, most of FXCM’s Q1 loss of $629 million was due to non-cash charges taken by the company connected to the effective equity value FXCM had to give up to Leucadia National Corp. (NYSE:LUK), to secure the $300 million loan from Leucadia which kept the company onside its regulatory capital obligations.

However investors seem to be focused not on FXCM’s nominal financial results, but rather on the fact that even if things do go well for FXCM operationally, most of that benefit will accrue to Leucadia, not to FXCM’s shareholders.

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