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WIKI ANALYSISFX Alliance (FXall) is a foreign exchange trading platform. The company's clients are institutions which use the service 24 hours a day, 5 days a week to evaluate prices, execute trades, enter into FX products like forwards and swaps. However, ((FXall)) does not act as a market maker and does not take positions on the market. Instead, all transactions are settled directly with the counterparty. The company makes money by charging transaction fees as well as license fees.[1]
Business Overview
For the first nine months of 2011, ((FXall)) reported a total revenue of $88.7M. This resulted in a net income of $18.3M. For the same period in 2010, the company reported a total revenue of $73.5M and a net income of $16M. [2]
New Updates
Thomson Reuters (TSX / NYSE: TRI), the world’s leading source of intelligent information for businesses and professionals, today announced that it has completed its acquisition of FXall (NYSE:FX), the leading multi-bank electronic foreign exchange platform.
This follows the agreement that was announced on July 09, 2012. Thomson Reuters, through its subsidiary, CB Transaction Corp. (“CB”), completed the acquisition through a cash tender offer and by exercising a top-up option to acquire additional shares directly from FXall followed by a short-form merger of CB with and into FXall on August 20, 2012.
The acquisition brings FXall’s leading trading and workflow processes which are used by over 1,300 institutional clients including asset managers, corporations, banks, broker-dealers and hedge funds into Thomson Reuters, combining two leading companies in their respective segments of the dynamic foreign exchange marketplace.
The company's initial public offering of stock on the NYSE occurred on February 8, 2012. The company offered 5.2M shares each for $12. This was below the $13.50-$15.50 initial price range. The deal raised a total of $62.4M. The lead mangers of the deal were BofA, Goldman, and Citi.[3]
Trends & Forces
Platform and Not Market Maker
Because ((FXall)) does not act as a market maker, it does not take any active positions in the market. Instead, it acts like a messenger and simply identifies two parties and allows them to settle their transactions between themselves. This allows ((FXall to remain unbiased in its search for the optimal price for both parties. However, it does prevent the company from taking advantage of movements in the market. As a result, ((FXall)) is fundamentally dependent on the volume of trading in the FX market rather than its directional movement. [4]
- ↑ FX S-1/A 2012 PROSPECTUS SUMMARY "Our Company" pg 1-2
- ↑ FX S-1/A 2012 PROSPECTUS SUMMARY "SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA" pg 10
- ↑ Renaissance Capital - IPO Home "FX Alliance prices IPO at $12, below the range" 8 Feb 2012
- ↑ FX S-1/A 2012 PROSPECTUS SUMMARY "Risks Related to Our Busines" pg 13-15
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