This day in history: September 9, 2010 – FXCM’s $421 million IPO becomes $1 billion as firm goes public

We take a look back at “This day in history” within the world of FX taking a journey through annuls of time to look at the various groundbreaking developments that continue to take place in our fascinating industry.

Drew Niv

On this day six years ago, the deluge of FX firms which rallied to list their stock on public exchanges was initiated by North American electronic giant FXCM which issued an initial public offering, signaling the beginning of its elevation of status in which today stands the company as one of the world’s largest retail FX companies, and one of the United States’ mainstays alongside publicly listed peers GAIN Capital and Interactive Brokers.

The corporate landscape of the FX industry was substantially different six years ago, and arguably unrecognizable from that of today.

GAIN Capital had become a publicly listed entity on the New York Stock Exchange just one year earlier, an FXCM was busily engaged in its imminent acquisition of British spread betting company ODL Securities, whilst Cypriot giant FxPro looked toward a listing on London Stock Exchange’s Alternative Investment Market, signaling the path toward many other FX companies following suit.

Underwritten by Credit Suisse, Barclays Capital, JPMorgan, Deutsche Bank Securities, UBS Investment Bank alongside Sandler O’Neill & Partners, FXCM’s initial filing with the Securities and Exchange Commission (SEC) noted that the firm was intending to offer all 15,060,000 shares in its initial public offering (IPO), amounting to an approximate pre-flotation valuation of just over $421 million.

Factoring in the acquisition of ODL Securities placed the entire corporate valuation at approximately $680 million at the time according to filings by FXCM with the SEC.

Just a few months later, FXCM’s public listing was completed, however the post-IPO value of the company represented a stratospheric appreciation in value with the firm raising over $210 million in share capital, having listed its stock at prices between $13 and $15, making for a post IPO valuation of approximately $1 billion.

Indeed, six years is a lifetime in this rapidly evolving industry, and long-term CEO Drew Niv remains a pillar of the FX industry’s leadership, having spoke to FinanceFeeds at length recently during a meeting at his office in New York with regard to how he steered the company through the events that unfolded after the Swiss National Bank removed the peg on the EURCHF pair, sending markets into a torrent of unprecedented and unexpected volatility, and causing the company to take an emergency loan from Leucadia.

Mr. Niv is to be commended for having retained the company on a completely even keel, with only the share prices dented, a matter which was addressed in the form of a reverse stock split.

This year, the company reentered the institutional FX sector, reviving FXCMPro, and has focused on innovating its execution model with new products.

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