Shares of MF Global Holdings Ltd. climbed to a 52-week high Wednesday, a day after the brokerage named former New Jersey Governor Jon S. Corzine as its new chairman and CEO.
Corzine, a former chairman of Goldman Sachs Group Inc. and U.S. senator representing the state of New Jersey, takes over immediately from Bernard W. Dan, who resigned as CEO for personal reasons, but will remain through May 16 to help with the transition. Alison J. Carnwath is stepping down as chairman in August, after completing her three-year commitment to the company.
MF Global shares rose 66 cents, or 9 percent, to $7.98 in morning trading and earlier hit $8.42, a 52-week high.
A new CEO "brings a lot to the table," wrote Ticonderoga Securities analyst Christopher Allen in a note to clients Wednesday. "With his background and the potential earnings power of this franchise, we continue to see MF as an extremely attractive investment."
That said, "(Corzine) clearly has work to do, as the current environment remains challenging," added Allen, who currently has a "Buy" rating on the company.
MF Global, which in January moved its official residence to the U.S. from the tax haven of Bermuda, has faced a turbulent couple of years. In 2008, a scandal involving a rogue trader sent its stock plunging more than 80 percent, slashing hundreds of millions from MF's market value. CEO Kevin Davis stepped down later that year and was succeeded by Dan, a former president and CEO of the Chicago Board of Trade.
The brokerage recently reported a fiscal third-quarter loss as revenue fell 17 percent due to lower interest rates and other economic factors. MF also shook up its U.S. equity business, expanding its derivatives, portfolio trading and electronic trading services teams and agreeing to sell its interdealer broker business.
The company has also provided net revenue guidance of $235 million to $245 million for the fiscal fourth-quarter.
Given the guidance, Allen lowered his earnings estimate by 2 cents to 3 cents per share for the quarter. Analysts surveyed by Thomson Reuters forecast earnings of about 4 cents per share.
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