Approval for 1-for-10 Reverse Stock Split - Report on FXCM Inc.

Aug 03, 2015, 09:10 ET from www.aciassociation.com

NEW YORK, August 3, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on FXCM Inc. (NYSE: FXCM). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=FXCM

Highlights from our FXCM Report include:

  • 1-for-10 Reverse Stock Split - On July 21, 2015, FXCM Inc., a leading online provider of foreign exchange (FX) trading and related services announced that the Company's Board of Directors has approved a 1-for-10 reverse stock split of its issued and outstanding Class A common stock. According to the announcement made by the Company, FXCM plans to hold a special meeting of stockholders on September 21, 2015 to seek their approval to amend FXCM's Certificate of Incorporation to effect the reverse stock split and authorized FXCM's Board of Directors to determine the effective date of the reverse stock split.
  • Management View & Listing Conditions - Drew Niv, the Chief Executive Officer and Chairman of the Board of FXCM said that the execution of the reverse split represents an important step in achieving several significant corporate objectives, including FXCM's continued listing on the New York Stock Exchange. He added that the NYSE requires certain standards to be met for continuous listing on its exchange, and while the Company currently satisfies all of those obligations and does not anticipate that changing, a reverse stock split will only serve to help strengthen its status and protect the Company and its shareholders. As per a same day report by the Wall Street Journal, among NYSE's listing conditions, a company needs to maintain a price of at least $1 a share. Citing the Company, the Wall Street Journal report highlighted that a higher share price could also appeal to brokerage houses and institutional investors that would ordinarily stay away from low-priced stocks.
  • Other Conditions of the Stock Split - At the effective time of the reverse stock split, every ten shares of issued and outstanding Class A common stock will be converted into one newly issued share of Class A common stock. For those shareholders, if any, who are entitled to a fractional shares due to the reverse stock-split, the Company plans to pay cash in lieu of such fractional shares. Wall Street Journal report also mentioned that as of May 6, FXCM had 50.7 million Class A shares outstanding, according to a regulatory filing. It further added that Company employees held nearly 42% of the combined voting power of Class A and Class B shares as of December 31, 2014. Citing the Company, the report added that value of an investor's holding won't change and, as a recapitalization for U.S. federal income-tax purposes, shareholders generally won't recognize a gain or loss from the split, unless they receive any cash.

To find out how this influences our rating on FXCM Inc. read the full report in its entirely here: http://www.aciassociation.com/?c=FXCM

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