Gain Capital's IPO - interview with CEO Glenn Stevens

I just wrapped up a brief conference call with Gain Capital's CEO Glenn Stevens. Glenn was very excited about the prospects of the company and spoke lengthily about potential growth. Registration was completed yesterday and today is the first day that the shares are freely traded on NYSE under the GCAP ticker.

My view is that this IPO, which wasn't as successful as FXCM's, happened for two reasons: 1. Pressure from existing shareholders (Glenn mentioned that some of them date back as much as ten years) who wanted to liquidate their investment 2. The company which filed its first registration year and half a go was on a crossroad - cancel the IPO or go ahead with it even with less than optimal terms. I can certainly understand the decision finally made.

Glenn shared same details as became available in the previous post - 9 million shares were sold at $9 per share.

Q: I asked why wasn't there any other share capital raised as the company only raised about $5 million excluding shares that changed hands. Glenn answered that first of all there was a need to help previous investors liquidate and that Gain is a very healthy company which maintains high organic growth and for now doesn't foresee any additional capital raising.

My commentary: The company did however announce plans in the past to raise a bit more than what it ended up raising so I guess Gain had to reduce the amount at the last moment.

Q: I then inquired whether Gain is planning anything on the technological front and for instance whether it is going to acquire/offer the VT Trader platform of CMS 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 whose client book it recently acquired. Glenn's answer was that they are definitely considering this and the only question is whether they will offer VT Trader as a standalone platform or will just add some of its most interesting features to its existing platforms. The company is focused on technology and will continue developing and improving it.

My commentary: My take on this is that Gain's technology is a bit outdated and less competitive to others therefore I hope that Gain is planning on being more ambitious on this front. Specifically regarding the VT Trader platform - I've received a few emails from disgruntled CMS clients who were wondering why didn't Gain acquire the platform as well. Innovative platforms, mobile trading and especially social forex platforms are taking over and very well may be the next thing in this market.

Q: Lastly I asked whether Gain intend to pursue acquisitions and the reply was that Gain has a very good experience with acquiring client books and retaining more than 90% of clients (an interesting figure) and very well may look at other targets.

This summed up the interview and I would like to thank Glenn for taking the time to participate in this call.