Following our recent report that FXCM had made an unsolicited offer to acquire GAIN Capital it looked likely that the GAIN board weren't very keen on that prospect. That perception was confirmed this morning when I received an email signed:
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I received a message in my inbox this morning advising me that:
FXCM Proposes Acquisition of Gain Capital
According to the accompanying press release FXCM sent a letter to the members of GAIN's Board of Directors last night:
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GAIN Capital have just announced in a press release that:
It has reached an agreement to acquire the US-based retail forex business of GFT Forex ("GFT"), pending regulatory approval. Financial terms of the transaction were not disclosed.
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According to Michael Greenberg over at ForexMagnates his:
Sources reveal that Gain Capital is about to seal the deal with Interbank FX. No information is yet known and neither company confirmed the information – naturally because Gain is a public company. More details are expected soon.
We have speculated here on the likelihood of continuing consolidation in the retail forex "industry", particularly following the IPOs of GAIN and FXCM. No doubt the trend will continue for a while yet in the wake of regulatory changes, not to mention the activities of those regulators' lawyers! In all the circumstances it's an interesting coincidence that we mentioned IBFX in passing only this morning. Assuming that the acquisition goes ahead as Michael suggests, perhaps Forex.com will eventually start marketing EAs that don't work terribly well to their customers too? They do operate a dealing desk after all!
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Last week the NASDAQ listed TradeStation Group announced that:
With the launch of [its] new TradeStation Forex business, TradeStation will have transformed its forex offering from a fully disclosed operation, where it introduces customers to a third-party forex dealer, to one where its new subsidiary, TradeStation Forex, Inc., an approved Retail Foreign Exchange Dealer (RFED) and member of the NFA, acts as principal and directs aggregated pricing to its customers.
The third-party forex dealer referred to in the announcement is currently GAIN Capital, and TradeStation will shortly be cutting out that middleman and dealing directly with a number of liquidity providers. Retail forex traders will be able to use the recently introduced TradeStation 9.0 platform to access that liquidity, and the announcement also stated that:
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The OANDA version of MetaTrader 4 has been in beta testing for a while now. It sounds as though that testing is now finished, because today OANDA have announced that it is now possible to use MetaTrader 4 on a live fxTrade account. I can't find an online version of the press release, so here it is in full:
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Following their recent IPOs US brokers GAIN Capital and FXCM now seem to be engaged in a battle for the hearts and minds of retail forex traders instead of investors in their respective businesses. In a press release today FXCM announced a new section on their website which they call the FXCM Forex Execution Center. I can't help but wonder if that announcement is in any way related to the new Pricing and Execution section on GAIN's Forex.com website and their Trade Execution Scorecard, which was announced in a press release yesterday.
More on Dealing Desk or No Dealing Desk – Forex.com or FXCM?
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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:
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I'm not sure this is the sort of publicity GAIN Capital would want, particularly during their long drawn out IPO, but these things are sent to try us. The National Futures Association has just announced that:
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The Betfair Group IPO was initially mooted back in 2005, but was then put back on the shelf. On September 21st Betfair announced that they intended to list their shares on the London Stock Exchange and last week the prospectus was published at long last, informing any interested readers that:
More on Betfair IPO a Success. Will FXCM Succeed Where GAIN Did Not?
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