Thursday was supposed to be the first day of the future at FXCM Inc (NYSE:FXCM).
With FXCM’s reverse stock split complete and the specter of the company being delisted from the NYSE removed, we believe that FXCM management was planning on using FXCM’s ‘fresh start’ and new higher share price as a launching pad for bringing back investors and, of course, attracting clients.
But in what can only be seen as a case of really bad timing, FXCM admitted before US markets opened on Thursday that it was the victim of a successful hack, which saw client information compromised and even some wire transfers initiated, although FXCM did point out that all funds have been returned to the appropriate client accounts.
And so, the relaunch of ‘new’ FXCM shares Thursday was met with heavy selling. FXCM’s shares dropped to a new all-time low of $6.50 (which would have been 65 cents pre-reverse-split) during the first 20 minutes of trading, but did recover somewhat during the day closing at $8.01, down 8% on the day – and setting a new all-time low closing price for FXCM shares in the process.
FXCM share price past six months. Source: Google Finance.
We can’t know for sure, of course, if FXCM’s share price drop Thursday would have happened anyway, even without the hacking admission. However when trying to rekindle investor confidence in its shares, FXCM’s hacking admission certainly could not have helped.