DCM did generate a lot of free press for itself. But was it worth it? Would you give money to these guys???
As we’re proving here just by writing this, the innovative team at new FX and spreadbetting firm DCM Capital in the UK did succeed in getting for itself a healthy amount of free publicity by holding an online auction to sell DCM, even before it has started earning any revenue.
The auction itself, however, seems to have been a flop. And in terms of valuable publicity and building the brand of the company, we also question the wisdom of what they’ve done. Would you trust your money to these guys??? They’re clearly much more focused on cashing out than on building a business or on serving clients.
With final “bids” due last week (we doubt if any of the bids actually were arms-length independent bids), the auction closed with a top bid of £120,000, well below DCM’s “guide price” of £5 million, and below our estimate of the value of just DCM’s FSA license. The bids, of course, were non-binding anyway.
DCM advertises itself as a pre-revenue startup, built by a team of six people over 12 months with a £350,000 budget.
The more interesting thing to us is that Paul Hawtin (ex Saxo Bank sales trader) and his team at DCM have highlighted the increasing attention given to “sentiment trading” as an important trading signal. While it sounds somewhat flaky, sophisticated institutional traders have been using “sentiment analysis” for years. Sentiment analysis involves advanced algorithmic analysis crunching huge volumes of data from across the web universe, analyzing the general sentiment toward specific issues and products, which can help predict moves in the financial markets well before they actually occur. One of the first new trading apps to launch on tradable’s app platform is a Social Sentiment Indicator covering the major currency pairs, developed by Knowsis.
For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.