GAIN Commits to $50m Buyback after GTX Unit Sale

GAIN Capital has just committed to purchasing a substantial chunk of its own shares. The company recently sold its institutional GTX unit for $100 million. The move enables the firm to protect shareholder value at a time when the capitalization of retail brokers is declining fast.

GAIN will purchase $50 million of its own shares in a Dutch auction tender. The CEO of the company, Glenn Stevens outlined that the brokerage remains committed to executing a balanced capital allocation strategy.

“Given our strong capital position, we believe the offer is a prudent means to return capital to shareholders,” Stevens said. The company's net proceeds from the sale of GTX totaled about $85 million.

GAIN Capital’s CEO also highlighted that the primary drivers for the move are the company’s solid balance sheet position after the sale of GTX and the current market price of the firm’s shares.

“Our strong capital position allows us to make appropriate investments to pursue growth initiatives, consistent with our goal of delivering long-term value,” said Stevens.

Dutch Auction

GAIN Capital will purchase its stock via a "modified Dutch auction” which starts today. The tender offer is for $50 million worth of stock.

The price at which GAIN intends to purchase its shares if no less than $7.24. The maximum bid the company is putting on the market will be no more than $7.94 per share.

Yesterday’s closing price of GAIN's common stock was $6.91 per share. The buyback offer by GAIN starts with a 5 percent premium. The company will end its commitment on the 6th of November 2018.

GAIN Capital is enabling its investors with an opportunity to exit from their positions. The firm is providing significant Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term at a time when the market cap of retail brokers is declining rapidly.

Stock Performance

Shares of GAIN Capital are trading by a third lower when compared to the start of 2018. The company's brands 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.com and City Index have been actively exposed to Europe.

Back at the beginning of August, the European Securities Markets Authority (ESMA) started a new regulatory framework for retail brokers. The move has affected the retail brokerage industry harder than expected.