FXCM publishes Lucid Markets' P&L for 2009-2011; business highly profitable

In June 2012 FXCM acquired a controlling stake in Lucid Markets, a leading institutional Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market maker, valuing the company at $177.5m.

Structure of the deal: FXCM acquired a 50.1% controlling interest in LMT, an electronic market maker and trader in the institutional foreign Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term spot and futures markets headquartered in the U.K. to expand the Company’s presence and capabilities in the institutional marketplace. As consideration, the Company issued a $71.4 million, 3.5% unsecured promissory note, and 9.0 million unregistered shares of the Corporation’s Class A common stock to Lucid sellers as well as a $15.8 million, 3.5% unsecured promissory note for all liquid assets for a total purchase price of $177.5 million.

Not much was known about Lucid's financial results before that and FXCM is slowly releasing more and more information. At the acquisition date FXCM disclosed that Lucid transacted $13.4 trillion in volume in 2011. In its Q2 2012 report FXCM released some information about Lucid's Q2 2012 performance: revenue significantly dropped (as for most other market participants) and accounted for about $3.9 million in June 2012 for FXCM, meaning Lucid's revenue in Q2 2012 was about $8 million (a fifth of 2011 and similar to 2010) - this may explain the rather low multiple FXCM paid for Lucid.

Today we are treated with even more information: summary of Lucid Markets' P&L since inception in April 2009. With only about 16 employees the business is amazingly profitable.

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