Global Brokerage Inc. (GLBR)

[Crusen]

This is not true:

FXCM revenues will be increased SIGNIFICANTLY.

In fact, $30B / month is just a small fraction of the business FXCM does every month.

Less than 1/10. It's true; just look at the metrics they report.

Also, we do not know the terms of the deal, but can only assume it was made in both parties' best interests.

The FX business is a tough one, and FXCM operates on thin profit margins.

The gross profit margin for FXCM INC is currently extremely low, coming in at 2.79%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -608.05% is significantly below that of the industry average.

http://www.thestreet.com/story/13166644/1/fxcm-fxcm-weak-on-high-volume.html

Now, The Street ran a story on auto-generated screener crapola, suggesting FXCM could be a stock to watch, solely due to the large volume of Twitter, etc. driven traffic this pig has been seeing.

This is a STRONG stay-the-hell-away-from stock to serious investors.

That is because they realize the terms of the Leucadia loan were absolutely punitive.

The equity agreement with Leucadia is in force irregardless of loan repayment.

This is obvious from a thorough reading of the official filings.

For those who can't seem to wrap their heads around the stuffy language and technical terms, fortunately Niamh Alexander of KBW (with a current price target of $1.00) asked this question during the yearly CC:

Operator

Thank you. And our next question comes from the line of Niamh Alexander of KBW. Your line is now open.
Niamh Alexander - KBW

Robert, if I could just clarify with respect to Leucadia facility. So it sounds like you are really lining out quite a lot of businesses that add up to quite a lot of capital towards the repayment of the loan. Is there a scenario that we might have missed in the dossier and what scenario does that right to force a fail in three years go away and that whole kind of tranching of the consideration in the event of a fail. Like if you fully pay down the loan by a certain time, I guess we are trying to figure out how to value the stuff for public investors and that’s something that really weighs on it.
Robert Lande - CFO

No, the right to -- it's annual right that starts in three years from January '16. And then have the right to, can trigger a sale of all or a portion of the business and it is not tied to whether the loan is repaid. So right now what our game plan is is to repay loan and grow this business into something more than what it is right now.

http://seekingalpha.com/article/2998256-fxcms-fxcm-ceo-drew-niv-on-q4-2014-results-earnings-call-transcript


This is the un-ignorable elephant in the room.

This is the one issue which is at the forefront of every value investor's thoughts: Where is the equity, is this a good purchase...

The fundamentals scream NO!!!

And yes, that was the CFO of FXCM confirming everything I have been saying.