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Gain IPO At $9 Per Share – 35% Lower Than Midpoint

The IPO of Gain Capital was priced at $9 per share – significantly lower than the $13 to $15 price range expected, so it’s around 35% lower than the $14 midpoint.

Gain Capital, which holds the lucrative forex.com domain name, sold only around 407,000 shares in the IPO, with the rest of the 9 million shares were sold by the current shareholders. The original expectations stood on 11 million shares.

Nasdaq.com  reports about some of the shareholders, and their updated stakes:

The rest, nearly the entire amount on offer, belong to current holders. Sellers include 3i Group PLC (III.LN), which will roughly halve its stake to 13%, as well as Chairman Mark E. Galant and his family trust.  VantagePoint Venture Partners, Gain Capital’s largest investor at 30%, isn’t selling any shares, though its stake would drop a percentage point because of the offering’s dilutive effect.

So, the $3.6 million raised from external sources only cover the expenses of the IPO. The company will trade under GCAP. I’ve earlier reported about Gain’s expense-cover IPO. The rest of the sum, around $76.5 went from the public to the existing shareholders.

The existing shareholders made a mini “exit” in the meantime.

I believe that due to harsher market conditions, Gain preferred to retreat from the original programs, but still list the company in the stock exchange. In the future, if the price rises, the company could make another offering – this time getting money for the company’s expansion.

It will be interesting to watch how the stock of Gain and also of another US forex broker, FXCM, will trade after this event. Note that the share price of FXCM also dropped after the IPO – this probably weighed on the IPO of Gain Capital Holding as well.

Michael Greenberg sees a valuation of $279 million for the company after the IPO.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.