* Tighter leverage, loss of Tradestation may hurt -report
* Shares price could approach tangible book value-report
* Gain not immediately available for a comment
NEW YORK, April 10 Gain Capital Holdings Inc
(GCAP.N) shares could fall, perhaps in a decline of nearly 50
percent, because of tighter leverage rules, the loss of a key
customer, and a regulatory change that will hurt its metals
trading business, Barron's said in its April 11 edition.
The New York-based provider of retail foreign exchange
services and operator of the Forex.com Website went public in
December at $9 per share [ID:nN15132062]. Shares have since
declined 23 percent, closing Friday at $6.90 on the New York
Barron's said the shares "could drop further, perhaps
approaching its tangible book value of $3.50 a share."
It said the shares do not appear expensive, at roughly 7.5
times estimated 2011 profit of 92 cents per share, but that
these earnings could be "tough to hit" based on fourth-quarter
profit of 10 cents per share.
Gain did not immediately return telephone and e-mail
requests for a comment on Sunday.
According to the newspaper, the Commodity Futures Trading
Commission in October halved its leverage limit to 50-to-1,
while Japanese regulators will halve its own limit to 25-to-1
later this year.
This would force investors to put up more cash to maintain
large accounts and conduct larger trades, which help companies
such as Gain generate revenue.
According to the newspaper, Gain also stands to lose as a
customer Tradestation Group Inc TRAD.O, which accounted for 5
percent of trading volume last year but now plans to do foreign
exchange trading internally.
The newspaper also said last year's Dodd-Frank financial
legislation requires virtually all commodity trading to be done
on exchanges after July 15. It said over-the-counter metals
trading accounted for 6 percent of Gain's revenue in 2010.
(Reporting by Jonathan Stempel in New York)