Neustrada Supports JB Capital Proposal Regarding Gain Capital

Requests Gain Capital's Board change its recommendation.

Neustrada Capital LLC owns approximately 1% of Gain Capital Holdings, Inc and supports JB Capital’s proposal outlined in its Form 13D dated May 27, 2020.

Neustrada Capital noted in a letter sent to the Board on May 25, 2020 (attached) that it did not support the transaction for these reasons:

  • The extraordinary earnings since the transaction was announced.
     
  • The estimated net cash per share of $5.80 on May 31.
     
  • The estimated tangible book value of $8.10 on May 31.
     
  • The fact that the fairness opinion dated February 26 has not been updated.
     
  • Three Directors support Neustrada’s view.
     
  • The projected earnings power of $2.15 to $2.40 per share the company articulated in the attached presentation has been clearly substantiated.

Further, Neustrada noted that the Board’s own actions suggest the price is too low. Specifically:

  • Repurchasing 8.2 million shares in 2018 at $7.73/share.
  • Repurchasing 1.12 million shares in 2019 at $6.20/share.
  • These purchases were made at approximately book value.  You are now recommending holders sell shares at an approximate 25% discount to book value.
  • These purchases were made when the company had approximately $130 million debt outstanding versus a negligible amount at the projected closing date.
  • The Board awarded Mr. Glenn Stephens incentive compensation for 2020, however, shareholders are not able to share in 2020’s earnings.

Contact: Gerald Catenacci gcatenacci@neustrada.com

Source: Neustrada Capital LLC

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Categories: Publicly Traded

Tags: GAIN Capital, GCAP, JB Capital