Here come the hedge funds!
Here come the hedge funds explained by professional Forex trading experts the “Here come the hedge funds” FX trading team.
Here come the hedge funds
FXCM’s share price soared on Friday by 11% following the release of information (as reported in Business Insider) that several large and influential hedge fund investors had accumulated significant positions in FXCM stock. The largest reported position was an approximate one million share holding in FXCM by Ken Griffin’s Citadel Investment Group, among the largest and most successful hedge funds in the world.
Apparently Citadel held a smaller position (135,000 shares) as of December 31, but sold them all in Q1 when FXCM’s shares traded in the $12-14 range (after FXCM went public in an IPO at $14 per share in early December). Citadel has since repurchased an even larger position as FXCM’s shares dipped below $9 in recent weeks, following the release of Q1 results – on the day FXCM’s Q1 results were released (May 16), its stock sunk by 17%, and rival Gain Capital’s share price dove by 6%.
Citadel is quite familiar with the online brokerage business, having led a $2.5 billion investment in E*Trade in November 2007. It has since sold a good part of that investment. (Note that it is difficult to assess how Citadel has done on its E*Trade investment, which apparently helped E*Trade stave off bankruptcy nearly four years ago. E*Trade’s share price is well below where the investment was made, down by about two-thirds, but the transaction also included Citadel buying a troubled $3 billion asset-backed loan portfolio from E*Trade for $800 million in cash.)
Other hedge fund investors reporting positions in FXCM (holdings as of March 31) include Lee Ainslie (Maverick Capital), Steve Eisman (FrontPoint Partners), Robert Pohly (Samlyn Capital), Anand Parekh (Alyeska Investment), and Douglas Hirsch (Seneca Capital). As well, FXCM Director James Brown (of Long Ridge Equity Partners) bought 100,000 shares last Tuesday in the $9.01-$9.02 range.
Here come the hedge funds Conclusion
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