FXCM's IPO Shares Hit the Street Today

The first of what may eventually turn into a trio of forex initial public offerings finally came to fruition yesterday evening when FXCM announced that:

Its initial public offering of 15,060,000 shares of its Class A common stock has been priced at $14.00 per share. The shares are expected to begin trading tomorrow, December 2, 2010, on the New York Stock Exchange under the ticker symbol “FXCM.” The underwriters have been granted a 30-day option to purchase up to 2,259,000 additional shares of Class A common stock at the public offering price less the underwriting discount from FXCM if the underwriters sell more than 15,060,000 shares in the offering.

Time will tell if the underwriters manage to collect those additional shares at a bargain basement price, but FXCM seem to be well on the way to raising over $200 million in new capital. According to Bloomberg:

The IPO values New York-based FXCM at 16 times earnings, an 43 percent discount to the median of five companies cited in the IPO prospectus as competitors.

Sounds like a bargain to me, especially for those underwriters! As the IPO prospectus also points out:

Upon consummation of this offering, our existing owners will hold 60,240,000 Holdings Units (or 57,981,000 Holdings Units if the underwriters exercise in full their option to purchase additional shares of Class A common stock), all of which will be exchangeable for shares of our Class A common stock.

If everything goes according to plan it seems like a good bargain for those "existing owners" too, and FXCM, Inc. will be valued at over $1 billion.  The October IPO of Betfair here in the UK may provide some indication of how things are likely to go from here for the FXCM share price.  The Betfair indicative price range was set between £11.00 and £14.00. Shortly after trading in the shares started on the London Stock Exchange they were changing hands for over £16.00. Betfair shares are currently quoted on the LSE at 1215/1220.

Now that FXCM have shown the way, we can eagerly wait to discover if two other long drawn out IPO sagas eventually manage to be completed satisfactorily.  GAIN Capital look as if they're finally good to go in the very near future.  FxPro are now FSA regulated and open for business here in the UK, but their listing on AIM was postponed back in October due to "adverse market conditions" over here in Europe. Market conditions don't look to me like they've improved since then, so I expect we'll have quite a wait on our hands for that one!