GAIN Capital reports net loss of $60.8m for 2019

Maria Nikolova

The company blamed the losses on multi-year low volatility.

Online trading major Gain Capital Holdings Inc (NYSE:GCAP) certainly made a splash today by announcing its acquisition by INTL FCStone. GAIN also reported its results for the final quarter and full year to the end of December 31, 2019.

The company posted net loss of $60.8 million for full year 2019, with the net loss for the final quarter of 2019 being $31.2 million. This compares with net income of $28 million for full year 2018 and a net loss of $0.7 million for the final quarter of 2018.

Net revenues were sharply down from 2018 levels. GAIN reported net revenues of $233.9 million for full year 2019, down from $358 million a year earlier. Net revenues for the fourth quarter of 2019 amounted to $53.3 million, down from $79.9 million.

GAIN reported Adjusted EBITDA of $(4.6) million, compared to $86.5 million in 2018.

The company attributed the losses  to poor volatility. Glenn Stevens, CEO of GAIN Capital, explained:

“2019 will be marked as a year of multi-decade low volatility, or in some cases, such as Eurodollar, all-time lows, which understandably had an adverse impact on GAIN’s financial performance. Despite that, our focus on organic growth saw good year on year improvement in key underlying client metrics, with new direct opened accounts improving 67%, Retail client equity 12% higher and 3-month direct actives increasing for a fourth consecutive quarter to finish 13% above Q418. As such, we remain well positioned to capitalize on increased volatility upon the return of more normal market conditions.”

Also today, GAIN said it would be acquired by INTL FCStone in an all-cash transaction. GAIN’s stockholders will receive $6.00 per share, representing approximately $236 million in equity value.

The transaction represents a 70% premium to the closing share price of GAIN’s shares on February 26, 2020 and a 60% premium to the volume-weighted average price of GAIN’s stock in the 30 trading days ending on February 26, 2020.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading

Technology

DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.

<