FXCM Inc., which provides currency trading on the Internet for individual investors, raised $211 million selling its initial public offering at the midpoint of the forecast price range.
The operator of the DailyFX.com website sold 15.1 million shares at $14 each after offering them at $13 to $15, according to a filing with the Securities and Exchange Commission and data compiled by Bloomberg. At the midpoint, the IPO valued FXCM at 16 times earnings, an 42 percent discount to the median of five companies cited in the IPO prospectus as competitors, data compiled by IPOdesktop.com and Bloomberg show.
The initial offering was the first by an online trading platform since Interactive Brokers Group Inc. in May 2007 and followed the busiest month for U.S. IPOs in three years, data compiled by Bloomberg show. Foreign-exchange trading by individual investors has surged 12-fold since 2001, according to Boston-based Aite Group LLC.
The initial sale from FXCM is the only IPO scheduled for this week after 23 companies completed offerings last month, the most since November 2007, data compiled by Bloomberg show. Detroit-based General Motors Co. sold $18.1 billion of common shares in the second-largest U.S. IPO on record.
FXCM’s profits climbed 16 percent to $79.4 million in the first nine months of 2010 after rising 12 percent in the previous four years, according to its SEC filing.
Revenue increased 6.5 percent to $264 million in the first three quarters of this year. Trading from individual investors accounted for 94 percent of sales in 2009, the prospectus said.
The IPO midpoint valued FXCM at 16 times 2010 earnings, according to Marina del Rey, California-based IPOdesktop.com.
Interactive Brokers, the Greenwich, Connecticut-based options market maker, trades at 27.5 times estimated 2010 earnings, according to data compiled by Bloomberg. OptionsXpress Holdings Inc., the online derivatives brokerage in Chicago that completed an IPO in 2005, is valued at 20.1 times profit.
TD Ameritrade Holding Corp. the Omaha, Nebraska-based retail brokerage, trades at 17 times earnings for the year ended in September. E*Trade Financial Corp. of New York is valued at 437 times estimated 2010 profit and 26 times 2011 earnings, analysts’ estimates compiled by Bloomberg show.
Gain Capital’s IPO
Gain Capital Holdings Inc., the Bedminster, New Jersey- based operator of FOREX.com, registered with the SEC in August 2009 to sell $125 million of stock in an initial offering. The company said in an amended filing last week that it may raise $190 million.
FXCM and Gain Capital were seeking to go public after foreign exchange trading totaled an average of $4 trillion a day in April 2010, about 20 percent higher than three years earlier, according to data compiled by the Basel, Switzerland-based Bank of International Settlements.
Average daily currency trading by individual investors totaled about $125 billion in 2009, an increase from $10 billion in 2001, according to Sang Lee, managing partner at Aite Group, an advisory firm for the financial-services industry.
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