* New York firm puts saving its Nasdaq listing on back
* CEO Hughes discusses broader strategic initiatives
* "He's close to something," large investor says
By Jed Horowitz
NEW YORK, Nov 8 Gleacher & Co, a small
broker-dealer whose shares have plunged 43 percent in the past
12 months, said it is no longer pursuing short-term fixes for
its low share price, prompting investor speculation that it is
close to a sale.
Chief Executive Thomas Hughes was asked on an investor call
Thursday if he is considering a reverse stock split or tender
offer to lift Gleacher shares above a dollar to avoid delisting
by the Nasdaq Stock Market. Three months ago, Hughes identified
saving the listing as a priority..
"We've chosen not to proceed with any of those activities
for reasons that you probably understand," Hughes said.
Mendon Capital Advisors President Anton Schutz, who asked
the question on the conference call, said the response signals
that a deal may be imminent.
"He's indicating he's close to something," said Schutz,
whose firm owns 10.5 million shares of Gleacher. "He's motivated
to do something. It sounds like the Nasdaq listing is going to
take care of itself."
Shares of Gleacher, which have traded below $1 since early
May, were up 4.5 percent--or 3 cents a share--to 69 cents in
afternoon trading on Thursday.
The firm, whose chairman is former Morgan Stanley
investment banker Eric Gleacher, o n T hursday reported a
third-quarter operating loss of $2.8 million, or 2 cents a
share--about half the loss forecast by the small group of
analysts that follow Gleacher.
In this year's second quarter, the company, which has about
125 million shares outstanding, lost $60.8 million.
Gleacher's profitability problems are a microcosm of issues
facing small firms across Wall Street, which are suffering from
rising capital requirements, high compensation costs and a
paucity of investment banking deals and trading volume.
A Gleacher spokesman declined to comment on Hughes's remarks
on the conference call. The New York-based firm hired Credit
Suisse in August to "explore strategic alternatives."
In a statement issued on Thursday, Hughes said the strategic
review "may end in merger with a strategic counterparty, a
strategic acquisition, divestiture of business units, investment
in our company by a third party or a stay-the-course outcome."
Gleacher also said Thursday it will try to sell ClearPoint
Funding, a money-losing mortgage lender that it bought in
January 2011. A sale would help Gleacher recapture $30 million
of cash held in the business, company executives said.
Hughes has replaced Gleacher's entire management team since
his arrival in May 2011, trimmed its balance sheet by more than
$2 billion, dismantled its stock trading unit and slashed costs.
The firm's break-even target for profitability has fallen to
$160 million of revenue from about $240 million in 2010, he said
on the call.
Gleacher continues to experience an exodus of senior traders
and bankers, but Hughes said it also has recently recruited
"dozens of highly respected" fixed-income salespeople, traders
and bankers and may enter new areas such as investment
management and raising capital for small banks.
"Our goal now is to grow as fast as we possibly can," Hughes
said at the end of his investor conference call on Thursday.
Despite its name, Gleacher evolved from regional banking
firm First Albany, which sold a majority stake in 2007 to
private equity firm Matlin Patterson Global Advisers. The new
owners changed its name to Broadpoint Securities and two years
later tried to raise its cachet by buying the investment banking
boutique that Eric Gleacher founded in 1990. Gleacher, who also
advised on mergers and acquisitions at Lehman Brothers Holdings,
is now chairman of the eponymous firm.