FXCM Shares Popped: What You Need to Know (FXCM)

FXCM Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of foreign-exchange broker FXCM (NYSE: FXCM ) jumped as much as 11% in intraday trading before settling back down to a more modest gain.

So what: With no news out, today's action smells a lot like takeover speculation. Ever since Charles Schwab (NYSE: SCHW ) announced it will be acquiring optionsXpress (Nasdaq: OXPS ) , investors have been sniffing around for the next specialty broker that could be bought out. A blog post on Seeking Alpha this morning specifically mentioned FXCM as a potential takeover target in the wake of the Schwab/optionsXpress deal.

Now what: If you ask me, chasing after takeover speculation is among the least fruitful things that an investor can do. And in this case in particular, it seems a bit of a stretch. FXCM just went public in December -- if there had been bu yout interest it's likely that the company and its bankers would have pursued that prior to the IPO. Additionally, forex doesn't have the same widespread acceptance that options now enjoy. Maybe that will happen at some point -- and if it does it will be better for FXCM investors if it doesn't get acquired -- but I'm not sure larger brokers see a pressing need right now to expand their forex capabilities. Could an acquisition happen anyway? Sure, but investors are better off focusing on the company's fundamentals.

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optionsXpress Holdings and Charles Schwab are Motley Fool Stock Advisor choices. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer owns shares of optionsXpress but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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