Citigroup Reduces FXCM's Price Target, Maintains At Sell/High Risk Rating

William Katz of Citigroup on Tuesday maintained a Sell/High Risk rating on shares of FXCM Inc (NYSE: FXCM) with a price target lowered by $4.25 to $0.75 following details that emerged over the weekend of Leucadia's $300 million rescue package.

Katz notes that the “onerous” terms include an annual interest rate of 10 percent, increasing by 1.5 percent per annum each quarter, up to 17 percent. The loan is also subject to mandatory repayments and restructure covenants.

Katz states that the company will likely never achieve its prior market cap of $1.3 billion (now estimated at around $50 million to $68 million), even assuming a possible sale to a strategic buyer. The analyst adds that based on the disclosure, FXCM will try to sell itself by April 2015.

Shares of FXCM were down 90 percent Tuesday morning.