Big Plunge Gives FXCM Inc (FXCM) Temporary Reprieve from Shorts

FXCM landed on the short-sale restricted list after dropping hard on a delayed asset sale

Jan 13, 2016 at 12:31 PM
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Forex services provider FXCM Inc (NYSE:FXCM) is trading 15% lower at $14.40 today, after warning of delays in both the expected sale of its non-core asset and the repayment of its year-old loan from Leucadia National Corp. (NYSE:LUK). Additionally, FXCM reported a year-over-year drop of 9% in retail customer trading volume for the month of December, even as full-year volume increased 10% over 2014.

FXCM came dangerously close to bankruptcy just one year ago, after a surprise policy change from the Swiss National Bank. But after touching an all-time low of $5.26 in mid-December, the shares enjoyed a significant rally during the final two weeks of the year in response to data showing that short sellers unwound their pessimistic positions.

However, we now know that bears were actually targeting FXCM anew during the same time period the stock was rallying. Short interest on the forex specialist spiked 58% during the two-week reporting period ended Jan. 1, and now accounts for nearly 13% of the equity's available float.

Following the big decline in short interest through mid-December, though, the current accumulation of FXCM Inc (NYSE:FXCM) short interest totals only about 650,000 shares. And, thanks to today's big plunge, the stock is now on the short-sale restricted list.


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