And of course, that ignores some of the benefits and industrial logic we have discussed upfront. Dealing more generally with those two segments. This is where we are really dealing with either professional traders, hedge funds, institutions or buy-side accounts.
What Might The Insider Transactions At GAIN Capital Holdings Tell Us?
I think at this stage, we probably don’t have enough granularity, and we will obviously like to, during the – as soon as we can, get with Glenn and his team and start putting some real effort into quantifying those. We tend to be very conservative in terms of how we present stuff to our investors, and we didn’t want to overstretch ourselves. And sometimes these synergies are hard to achieve, and they’re also hard to point to sometimes because when we internalize a trading margin, it’s very hard to track that through a bulk and through to the market.
GCAP Related stocks
Many mutual funds distribute capital gains right before the end of the calendar year. Moving on, if you look at how that all shapes out in terms of an effective fully-synergized price for us, you can see that it really goes from sort of an 11 times EBITDA down to 4 times EBITDA. It is driven by the cost synergies we’ve just mentioned as well as the fact that we can, on a merged basis, extract some capital and, therefore, reduce the capital commitment to this business.
What Is a Net Capital Gain?
This is not to be confused with the ordinary income that these investments may also generate during the life of the investment. For example, interest payments and rent aren’t generally considered capital gains, but are rather taxed as ordinary income. This circumstance is referred to as a fund’s capital gains exposure. When distributed by a fund, capital gains are a taxable obligation for the fund’s investors. Mutual funds that accumulate realized capital gains throughout the tax year must distribute these gains to shareholders.
Understanding Capital Gains
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So why don’t I stop there and see if we have any questions. And 2019, really, in many ways, stood out as a real oddball year. And to some degree, masks some of the progress that we made with products and with new customers, adding new customers, adding new markets across the board.
At this time all participants are in a listen-only mode, after the speakers’ presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand dowmarkets the conference over to your speaker today, Sean O’Connor, CEO, INTL FCStone. Highlights important summary options statistics to provide a forward looking indication of investors’ sentiment. Provides a general description of the business conducted by this company.
And through Daniels, Gain has a very similar business. We have a lot of capabilities that I think we can add to the Gain business. And I think our hope and desire is, by doing that, we will have a better and more attractive offering to the customers. That should allow us to grow our customers and potentially go for higher quality customers up the chain. And that we will make more from each customer because we have a broadened product offering.
This is where we deal with commercial clients and hedge their risk. But obviously, Gain has a small piece of that because they have the top third. We know top third, we bump into them, they are competitors of ours. So what we believe is just through the straight cost synergies by putting these two companies together, we can take even the worst results that Gain has produced in a long time in 2019.
The company offers trading services for CFDs on shares, forex, indices, commodities, options, and more. Sean Michael O’Connor has been the CEO of the company since 2002. The IRS has a number of resources to help you. And you can always consult a tax professional to help you understand how your investments may impact your tax situation.
Trading was provided via one of two electronic trading platforms, its own proprietary FOREXTrader PRO later renamed as StoneX Pro and MetaTrader 4. GAIN Capital allowed retail and institutional clients to speculate on global foreign exchange markets in what is known as ‘margin forex trading’. GAIN Capital Holdings, Inc., together with its subsidiary, provides trading services and solutions to retail, institutional, and futures service customers worldwide.
GAIN Capital Holdings, Inc., together with its subsidiary, provides trading services and solutions to the over-the-counter (OTC) and exchange-traded markets worldwide. The company also offers execution and risk management services for exchange-traded futures and futures options on the United States and European futures and options exchanges; and online trading services. GAIN Capital Holdings, Inc. operates as a subsidiary of StoneX Group Inc.
All investors should have some understanding of how capital gains work so you aren’t surprised come April. Here are a few key capital gains facts to get you started. For these reasons, a thorough understanding of capital gains taxes can make a big difference for an investor.
As such, these gains are taxed as ordinary income based on the individual’s tax filing status and adjusted gross income (AGI). And what we have built over-time is a financial platform that connects clients to markets. https://forex-reviews.org/ We are probably the only midsized company now that is a clearing and execution member of 46 derivative exchanges around the world. We can take our customers to pretty much any securities market in the world.
And we didn’t think this would apply really, but we sort of looked at the list of their top 100 equities. And we, market makers, I think, own 45 of them. And so immediately Gain gets to deal with us as https://forex-review.net/fx-choice-broker-review/ a market maker, and we get to take a market maker spread on Gain’s flows. So somewhere in the firm, we’re going to make more money as a result of that. But it’s very hard to quantify and track that.
This can include a type of investment (like a stock, bond, or real estate) or something purchased for personal use (like furniture or a boat). It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information. Market cap, also known as market capitalization, is the total market value of a company. It’s calculated by multiplying the current market price by the total number of shares outstanding. Gain Capital Holdings Inc market cap is $228.34M.
That can be a huge benefit since many people move to a lower tax bracket than the one they were in when they were in the peak of their earning years. Selling an investment typically has tax consequences. To figure out whether you need to report a gain—or can claim a loss—you need to know the cost “basis” for that investment. Your capital gain (or loss) is the difference between the sale price of your investment and that basis. A capital loss is the opposite of a capital gain. It is incurred when there is a decrease in the capital asset value compared to an asset’s purchase price.
There are probably some of you on the call who are not familiar with INTL side of the business. So maybe I can just spend a little bit of time going through that and telling you a little bit about us. So this business was started about 13 years ago by myself. We have built the business, both organically and through acquisitions. The largest acquisition we did in 2009 was that of FCStone. All market data (will open in new tab) is provided by Barchart Solutions.
And being able to deal with a lot of people. On what Sean and his team, I think was reflective with us, it wasn’t contentious. We are very conservative in terms of making sure that when we enter into transactions, we do them at a price that provides us a margin of safety.
- Just running through the next slide, sources and uses of cash, I think we covered most of this on the user side.
- For example, a price above its moving average is generally considered an upward trend or a buy.
- And on the long tail of 12 to 18, that’s key because it shows you what can be converted very quickly.
- So maybe I can just spend a little bit of time going through that and telling you a little bit about us.
- On the far-right side, you will see basically our securities and what we call care in execution services.
- Sean, if I may just jump in, I just wanted to highlight and kind of emphasize exactly what you were just saying.
For example, say you file single and generally have an AGI of $35,000, which puts you in the 12 percent tax bracket. But this year you sell an investment with a capital gain of $5,000. That may change your AGI to $40,000—and push you into the next tax bracket—22 percent.
So I guess my question first is, when you look at the transaction, and you’ve done a fantastic job about the potential products that you can expand to each other and the potential synergies. But I guess, at least in the retail space, Glenn, you yourself have done a tremendous amount of acquisitions and roll-ups, where you can actually remove a platform. And synergies are substantially higher, I guess, when they’re sort of within industry. So I guess, the question comes, like, did you weigh acquisitions like that? Or did you – entertain potential acquisitions like that, Glenn.
You’ll see the little on the top left of that kind of Doughnut, the 21%, that’s really Gain’s retail business there. I was just going to add to your point about what we consider kind of an opportunity to regress to more normal levels in terms of activities and market conditions. As you pointed out on the slide in terms of where the CVIX was and even VIX in general, we recently published our January activity levels. And even when people just look around and see markets moving a bit from where they were.
And again, acknowledging that there is a lot of benefits between INTL FCStone and Gain as well. If you look, I guess, at EBITDA, you can see our EBITDA for the trailing 12 months, you can see the projections we have there, and we’ll go through those. And you can see how accretive this is to EBITDA. Near and dear to my heart is the one down at the bottom. Fundamentally, we want to keep compounding our capital. Warren Buffet 101 is our kind of North Star here at INTL.
Just as I talked a little bit about 2019, we’re on a calendar fiscal year, if you will. And so we just had some commentary built around, but the highlight there was just to show to how, pretty much, anomalous 2019 was in terms of market conditions. We measure things on our volume, we measure things on our revenue capture.
You now have 20 percent more cash in your pocket, right? Not so fast—don’t forget about the capital gains tax. INTL FCStone Inc., through its subsidiaries, is a leading provider of execution, risk management and advisory services, market intelligence, and clearing services across asset classes and markets around the world. They want to put more flow on their financial network. They want to put more traffic on to their existing infrastructure.
This is explaining how we get to the pro forma numbers. So if you want to look at the sort of top slice of that slide. On the left there, you can see the key drivers that Gain uses to predict or drive their business, that’s just really their rate per million revenue capture and the ADV. If you go down sort of three blocks below that, you can see professional traders under listed derivatives. We have a very big business in executing and clearing for professional traders on the exchanges. We have a very big market share in this business.