FXCM Plans 1-for-10 Reverse Stock Split

By Maria Armental 

        Foreign-exchange broker FXCM Inc. plans to cut the number of its publicly traded shares with a 1-for-10 reverse stock split, a move the company said is key to remaining on the New York Stock Exchange.
        FXCM's stock closed Tuesday at $1.29 a share, and it was quoted at $1.22 in after-hours trading. Shares, which traded at $12.63 on Jan. 16, lost 87% of their value after Switzerland's central bank removed its cap on the Swiss franc.
        The NYSE requires, among its listing conditions, that a company maintain a price of at least $1 a share.
        A higher share price, the company said, could also appeal to brokerage houses and institutional investors that would ordinarily shy away from low-price stocks.
        Shareholders would have to approve the proposed reverse stock split at a special meeting scheduled for Sept. 21.
        If approved, every 10 shares of the company's Class A common stock will be converted into one share. The 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, the company said.
        Shareholders who would be entitled to fractional shares would receive cash for that fractioned ownership, FXCM said.
        As of May 6, FXCM had 50.7 million Class A shares outstanding, according to a regulatory filing.
        Company employees held nearly 42% of the combined voting power of Class A and Class B shares as of Dec. 31. Class B shares aren't publicly traded.
        FXCM, one of the largest retail currency brokers in the world, provides online foreign-exchange trading, spread betting and related services. The New York-based broker lost millions of dollars this year after the Swiss National Bank said it would no longer cap the franc's value. Leucadia National Corp., the holding company for investment bank Jefferies Group LLC, rescued FXCM with an emergency $300 million lifeline.
        The broker swung to a first-quarter loss as it booked a $393.3 million loss from continuing operations, largely tied to the January surge in the franc.
        Write to Maria Armental at maria.armental@wsj.com
        Access Investor Kit for FXCM, Inc.
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        (END) Dow Jones Newswires

        July 21, 2015 18:13 ET (22:13 GMT)

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