Global Brokerage (FXCM Inc) warns of default possibility due to potential NASDAQ delisting in 6 months

Maria Nikolova

The company is engaging with convertible bondholders in order to find a solution.

Earlier this month, it became clear that Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc is having hard time remaining listed on NASDAQ. While there is no immediate change to the company’s listed status at this point, unless its market capitalization rises sufficiently to meet NASDAQ listing criteria by the end of October this year, the company faces delisting.

Today, Global Brokerage Inc reiterated the possible heavy consequences from an eventual delisting, as it announced its results for the first quarter of 2017. The Investor Presentation bluntly said that there is a risk of potential delisting in 6 months from NASDAQ Global Select Market that could accelerate debt obligations and this is creating a going concern issue this quarter which looks out 12 months. “This could lead to an event of default”, Global Brokerage warns.

The company is now engaging with convertible bondholders, as it explores refinancing alternatives.

This adds to other warnings featured in FXCM’s annual report for 2016 – in it, the word “default” appears at least a dozen times. Let’s recall that in the report, FXCM said that if Leucadia accelerates the repayment of borrowings, the broker may not have sufficient assets to repay its debt or it would have a material adverse effect on its business, operations, financial condition and liquidity.

“The Convertible Notes mature on June 15, 2018. At that time, we will be obligated to repay the aggregate principal amount of the Convertible Notes. We may not have enough available cash or be able to obtain financing at that time to meet our repayment obligations”, Global Brokerage warned back then.

In addition, certain provisions of the Convertible Notes could discourage an acquisition of the broker by a third party, as they render the broker more expensive to buy. There are also anti-takeover provisions in Delaware law.

FXCM’s Class A common stock traded on the New York Stock Exchange under the symbol “FXCM” until the broker voluntarily delisted from the NYSE on September 23, 2016. Effective September 26, 2016, its Class A common stock began trading on the NASDAQ Global Market of The NASDAQ Stock Market LLC under the symbol “FXCM.” The transfer to the NASDAQ Global Market was dubbed to provide better alignment with FXCM’s business.

On February 24, 2017, FXCM Inc changed its name to Global Brokerage, Inc. Its Class A common stock began trading on the NASDAQ under the symbol “GLBR” effective February 27, 2017.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<