FXCM Takeover? Not so Fast

Mere speculation about FXCM being bought out sent the stock price way up, but as Michael Greenberg reports here, there is nothing behind these talks, and there’s actually no basis for an acquisition of FXCM, perhaps an acquisition of another forex broker by FXCM.

Here’s a quote from the article:

This speculative list was published following Charles Schwab’s acquisition of optionsXpress for $1 billion and FXCM is mentioned there with no apparent reason except that it trades at a discount relatively to other trading firms. The funny thing is that FXCM has completed its IPO only three months ago and I’m sure that it received quite a few acquisition offers prior to being listed and obviously rejected them all. Knowing a bit about the company and its management I know that they do not intend to sell out that quickly especially after liquidating some of their investments already. They are not hungry for cash right now. FXCM, as it announced, intends to be a consolidator in the retail forex business not a ‘consolidatee’.

I believe we’ll see acquisitions of forex brokers, especially in the US, as regulation gets tougher – brokers buying brokers. A candidate to buy FXCM is not likely to come from the forex scene, but perhaps from big investment houses wanting to diversify their portfolio.

And as FXCM’s IPO happened just a few months ago, I also believe it will take some time.