Why did LCG can LCG Digital after just 6 months?
As LCG Digital is discontinued, another short term project by LCG falls by the wayside as digital marketing operations are relocated back to London
As far as white elephant projects are concerned, one particular company that has involved itself in various new initiatives only to reverse them after a very short time is LCG.
After continual management changes, various short-term corporate directions, and new ventures which have rarely come to fruition, the latest casualty of the revolving door nature of one of London’s oldest CFD and spread betting firms is today’s annunciation of the end of the road for LCG Digital after just 6 months.
On February 1 this year, LCG began its foray into affiliate marketing with the launch of LCG Digital, from its newly established base in Tel Aviv, Israel, led by Amedeo Muscato.
Mr. Muscato has a substantial background among some of Israel’s widely recognized digital media and affiliate marketing firms including senior executive positions at OptionTime and AffOption, The Nation Traffic, Playtech and TraffiNet before assuming his position as CEO of LCG Digital.
On the face of it, this may have been an unusual step for a Lond0n-centric CFD and spread betting firm that has been established for over 30 years, and many would be forgiven for thinking that this is a very significant diversion from LCG’s core business at a time at which the company is continuing to hemorrhage capital, and is unsure of its own management team’s longevity.
Indeed, the digital marketing function of LCG has now been moved back to the company’s London headquarters, with LCG Digital, the Israeli subsidiary of LCG, now defunct.
The revolving door dynamics of LCG
Since LCG was purchased in 2014 by a conglomerate owned by various investment bankers, and Charles-Henri Sabet took the helm, the members of the company’s senior management, all of whom were hired post-acquisition and are very well recognized senior industry executives with several years of experience in leadership positions within some of the most widely recognized companies in this entire industry including IG Group, Alpari UK, ICAP and FXCM, have left the company after a very short time, compared to their very long tenures at previous companies.
At the time of the company’s purchase, it was losing money and had been a target for acquisition for quite some years, with four major firms looking to acquire it in 2013, all of whom pulled out, leaving the company to go it alone before being bought for £17 million in 2014.
Among the new management team following the acquisition of the company was Francois Nembrini, who had been Managing Director of FXCM’s institutional business for 12 years, Arman Tahmessebi, IG Group’s COO for 15 years, and Peter Wells, who had been at British interdealer broker ICAP for 28 years.
All have left, with Mr. Nembrini now heading AFX Group’s institutional division, Mr. Tahmessebi having moved on to ETX Capital as COO, and Mr. Wells having updated his LinkedIn profile recently to state that he is ‘taking a break from the City.’
Setting up an entirely new entity, in a different country to the main operations of a loss-making company whilst its balance sheet has been in the red since 2011 and then canning it just six months later could be construed as a very unusual step to take.
In the beginning of 2015, LCG’s losses ran at approximately £7 million for the first quarter, by the end of the year, the hole in the bucket had increased so much that the firm had made a £13.9 million loss for 2015.
In spite of such losses, LCG moved its operations from Devonshire Square in the heart of the City of London’s financial district to the highly exclusive 1 Knightsbridge in London’s West End, and underwent a rebrand, part of which involved the purchase of the LCG.com domain for $175,000.
Today, FinanceFeeds made contact with Amedeus Muscato, who left his position as CEO of LCG Digital this week to pursue his business, Soho Media which provides boutique traffic to firms across web, video and mobile advertising, however no comment on the matter was provided.
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