Fanatics will acquire Water Street Labs (DCM) and CX Clearinghouse (DCO) from BGC, enabling Fanatics Markets to operate a federally regulated prediction exchange with direct clearing. BGC will continue to provide data/analytics to Fanatics, while relinquishing its DCM/DCO assets. The deal shifts revenue mix away from DCM/DCO for BGC and creates potential upside in cross-brand data products and retail-institutional market access.
Howard Lutnick is selling ownership stakes as part of an ethics agreement. BGC Group is repurchasing over 16.4 million shares for $151.5 million. Shares will be bought at about $9.21 each, the average price last week. Cantor Fitzgerald maintains control over BGC Group and Newmark Group. Lutnick’s deals involve family trusts benefiting his children.
BofA analyst maintains bullish outlook for BGC and targets price at $15. BGC expected to launch Treasury futures soon, tapping into a $2B market. Ongoing geopolitical uncertainty creates favorable trading conditions for BGC. Market normalization may begin in late 2025, impacting trading volumes. Historical EPS beats expected for BGC amid broader market trends.
BGC launches FMX Futures Exchange to compete with CME Group. Futures on SOFR to start trading, Treasury futures by Q1 2025. Over $4 trillion in interest-rate futures traded daily, significant market share. FMX aims to reduce transaction costs and systemic risk in U.S. markets. Major banks supporting FMX indicate desire for alternatives in trading.
BofA downgraded CME Group to Underperform, lowering price target to $177. CME faces competition from BGC, Cboe, and ICE, risking market share. CME may cut interest rate future prices by over 10% due to BGC's FMX. CBOE's index options volume expected to grow 15% CAGR through 2026.
