BGC Partners, the global brokerage and financial technology company, has announced the completion of its corporate conversion to a full C-Corporation. As part of this transition, the company will now be known as BGC Group, Inc. and has updated its Nasdaq ticker symbol from ‘BGCP’ to ‘BGC’.
The change also extends to the company's digital presence. The main website is now accessible at http://www.bgcg.com and the investor relations website at http://ir.bgcg.com.
BGC Group Starts a New Chapter in Corporate Structure
BGC Group, Inc. will commence trading on Nasdaq under the new ticker symbol at the market opening on 3 July 2023. News of the rebranding was first published in November. After more than six months, the process of structural change is now complete.
Howard W. Lutnick, the Chairman of the Board and Chief Executive Officer of BGC, views the latest move as a significant development for the company. "Today represents an important step for BGC, with its conversion to a simpler, more efficient corporate structure," he commented.
Lutnick believes the revamped BGC will attract a broader and more diverse investor base in the future. The company aims to foster growth and deliver substantial long-term value to its shareholders. With improving trading conditions across the business and the upcoming launch of FMX, the company's electronic trading platform, Lutnick regards this as an exciting time for BGC.
BGC Group, Inc. is a leading global brokerage and financial technology company. Its various affiliates offer a broad range of products, including foreign exchange (FX), equities and futures. Additionally, BGC provides brokerage, clearing, and other back-office services to financial and non-financial institutions.
What Is the C-Corporation?
C-Corporations, commonly known as C-Corps, are one of the most prevalent types of legal structures for corporations in the United States. Unlike other corporate structures, a C-Corp is an independent legal entity distinct from its owners, the shareholders.
This separation provides a crucial benefit: limited liability. Shareholders are typically held accountable only for their investment in the corporation's stock, which means they are shielded from personal liability for the corporation's debts and legal obligations .
This corporate structure provides fluidity in terms of ownership. Shares in a C-Corp are easily transferable, allowing shareholders to sell their stakes without substantial barriers. Moreover, corporations can raise growth capital by issuing either common or preferred stock.
Despite the advantages, one significant downside of the C-Corp is double taxation. This situation arises when the corporation's profits are taxed initially at the corporate level and then again at the individual level when these profits are distributed as dividends to shareholders.
Analyzing BGC’s Financial Performance
According to BGC Partners report for 2022, which was published in February, the company saw a marginal decline in revenues from forex trading. The numbers decreased by 0.3% quarter-over-quarter (compared to 2021) to $71.9 million and 0.5% year-over-year (YoY) to $299.7 million.
The total brokerage revenue from all traded asset groups (excluding insurance) experienced a slight drop of 1.3% to $397.8 million, which is down from $403 million during Q4 2022. Furthermore, on a YoY basis, the total revenue of the asset classes declined 2.6% to $1.65 billion.
Three months later, Finance Magnates reported on BGC's results for the first quarter of 2023. FX revenues experienced modest growth this time, rising 0.2% to $80.2 million (or 1% in constant currency) compared to the first quarter of 2022.
