We don’t often make predictions at LeapRate, especially when it comes to share prices of publicly traded companies.
However this one seems to have panned out.
Our first reaction to FXCM’s December 11 announcement that it is attempting to renegotiate the terms of its $300 million rescue loan with Leucadia National Corp (NYSE:LUK) was:
Without looking too deep into our crystal ball, we see some more wild volatility ahead in FXCM shares until the company gives definitive word of an agreement with Leucadia…
And FXCM Inc (NYSE:FXCM) shares have not disappointed. Wednesday saw more absolutely wild action in FXCM shares in NYSE trading, on another huge volume day where more than 6 million FXCM shares traded hands. That’s nearly the entire public float of FXCM.
As with the past three trading days, FXCM stock shot up from the open, rising 25% and hitting an intraday high of $24.77 mid morning – the highest FXCM shares have been since mid March.
However the party did not last long, with profit taking and short speculation overtaking the bulls sending FXCM shares down for most of the rest of day. Overall, FXCM shares were down 7% on the day closing at $18.45. Overall, FXCM had a 32% swing in price from top to close.
There’s no new news (or old news, for that matter) driving the bus here, just good ol’ speculation regarding FXCM’s chances of actually renegotiating the Leucadia loan terms.
We’ll continue to follow this story, but we expect more of the same up and down action in FXCM stock until either the company or Leucadia clarify the situation.