LeapRate Exclusive… LeapRate has learned via regulatory filings that global investment bank Goldman Sachs Group Inc (NYSE:GS) has been steadily selling down its stake in UK based online FX and spread betting broker CMC Markets Plc (LON:CMCX) over the past few weeks.
Goldman Sachs has been a long term investor in CMC Markets, and in fact was the company’s second largest shareholder behind founder and CEO Peter Cruddas when CMC went public in a £218 million IPO last year.
Goldman had since retained its approximate 5% stake in CMC Markets, but apparently was getting somewhat frustrated after CMC shares declined from their £2.40 per share IPO price to under £1 last December. The company’s share price decline was partly self inflicted, with CMC Markets’ results under-performing post IPO expectations, as well as a result of the FCA’s surprise announcement to set new rules for Forex and CFD brokerage, including a hard 50x leverage cap and a ban on bonus payments to clients.
However – as was exclusively reported at LeapRate – the company’s fortunes seem to have turned around in early 2017, with CMC Markets Fiscal 2017 2H results through to March 31, 2017 significantly better than the previous six month period.
Those results, alongside our exclusive analysis of what was ‘really going on’ behind the numbers, led to a nice run-up in CMC Markets’ share price over the past three weeks (see graph below), with CMCX back above £1.50 per share for the first time since before the FCA announcement last December.
It looks like Goldman Sachs isn’t waiting for CMC’s share price to get back to its IPO levels, and is taking the positive momentum in the stock over the past three weeks to start selling. Several regulatory filings have indicated that Goldman has taken its 5% stake down to 3.34% currently. Between June 8 and June 20, Goldman sold 2.1 million CMC shares for approximately £3.1 million (USD $3.9 million), leaving Goldman holding 9.63 million shares worth today £14.6 million ($18.6 million).
We would note that other investors have taken the post-FCA announcement dip in CMC shares, as well as in those of publicly traded rivals such as IG Group Holdings plc (LON:IGG) and Plus500 Ltd (LON:PLUS), to build up a stake in those companies. As was exclusively reported at LeapRate, Norwegian central bank Norges has acquired a 4% position in CMC Markets.
Goldman Sachs rival Morgan Stanley (NYSE:MS) has built up a 7.8% stake in Plus500, while BlackRock has upped its position in IG Group to above 10%.
CMC Markets share price past three months. Source: Google Finance.