Description

Gleacher & Company, Inc. (“Gleacher”, “GLCH" or the “Company”) is a full service investment bank providing corporate and institutional clients with advice and execution in the areas of advisory services, capital raising and research, sales and trading. The Company offers a range of products through its Investment Banking, Mortgage Backed Securities & Rates ("MBS & Rates") and Credit Products divisions. The Company was originally incorporated in 1985 in the state of New York and re-incorporated under the laws of the state of Delaware in 2010.

The Company previously provided residential mortgage lending services through its subsidiary, ClearPoint Funding Inc. ("ClearPoint").  On February 14, 2013, the Company entered into an agreement to sell substantially all of the assets of ClearPoint to Homeward Residential, Inc.  This transaction closed on February 22, 2013, and all remaining business activities of ClearPoint are being wound down.  This should add $25 million in cash to its balance sheet, release $190 million in off-balance sheet obligations, stem $6 million in operational losses and book a one-time loss of $5 million. 

We believe that the Company’s recent turmoil has created a buying opportunity in what appears to be, at first glance, a “hairy” outlook for the business.  To appreciate this outlook and the opportunity at hand, we believe the following pros and cons are important to understand.  On the pro side: the Company (i) has decreased its balance sheet exposure; (ii) has no debt, so risk of filing for bankruptcy is remote; (iii) is trading below liquid working capital; (iv) is a good M&A candidate on the back of a decent M&A market for boutique investment banks; (v) will have a new board to oversee positive corporate/strategic initiatives; (vi) has announced a $10 million share repurchase program with the view toward larger accretive share repurchases and/or tender offers.  On the con side: the Company: (i) has $69 million in off-balance sheet lease obligations; (ii) has a significantly uncertain earnings outlook; (iii) has an operational cash burn of $23 million which needs to be curtailed; (iv) may enter a proxy battle with its largest shareholder and other activist investors as shareholders seek to replace four board seats and implement an ideal strategic plan; (v) has seen employee defection and low morale as losses in all its businesses have accelerated.

Although we believe that the fall in the stock price was highly warranted, we appreciate that GLCH’s balance sheet has become cleaner and more transparent.  Furthermore, we believe that management and the Board are racing toward a break-even or better profit year in 2013.  This strategy should position the Company for a potential sale or at the very least the realization of a value closer to tangible book value per share. 

GLCH is currently trading at 44% discount to liquid cash.[1]  We currently value GLCH’s stock at $1.07 per share.  Therefore, we are buyers of the stock at or below $0.60 per share.  We believe that there is an inherent intrinsic value floor of $1.00 per share, which reflects the approximate liquid cash component of net assets.  Our valuation omits any credit for improving earnings power of the business.

Recent Events

Over the last few years, Gleacher has been heavily affected by the financial crisis as trading volumes, M&A advisory and general financial advisory have dried up.  As a result, the Company has faced numerous restructurings (see Exhibit 14), goodwill write downs, divestitures, firings and employee defections.  In late January 2013, Eric Gleacher, the Company’s founder, resigned as board chairman and as an officer and director of the Company.  In August 2011, GLCH implemented a strategic review and action plan to sell part or all of its businesses as a means of stemming losses.  Yet, the Company has struggled to find a credible buyer over the last eighteen months.  On March 18, 2013, the Company announced in its 10-K filing that these types of recent events have led to a "serious decline" in its financial results that have affected its ongoing business operations. 

Gleacher’s largest owner, financial sponsor MatlinPatterson Global Advisers (“MP”) has recently expressed their frustration with the Board’s inability/unwillingness to sell the firm.  In the 1Q 2013, four Board members notified the firm of their intention to not stand for re-election after learning that MP (29% ownership) would not support their re-election and would, instead, nominate alternative candidates.  These four board members played a key role in the firm's strategic review, which recently concluded that "staying the course" would be most beneficial to shareholders. 

It has been reported that in June 2012, Stifel Financial (NYSE: “SF” or “Stifel”) made a non-binding bid of $200 million (~$1.65 per share), excluding a $50 million retention pool, to acquire GLCH. Stifel's offer implied 0.87x TBV (on 1Q12) and represented an 80% premium per share at the time.  Stifel subsequently lowered its offer in September 2012, to about $150 million (~$1.25 per share), excluding retention payments, which translated to 0.80x TBV (on 2Q12) and represented a 51% premium per share.  With the stock down another 18% since then, we believe the decision to not pursue a transaction is the root of MP's displeasure.  The lack of significant development in the Company's search for a suitable strategic transaction has heightened uncertainty among its trading partners and employees.  We believe that Gleacher's board may have underestimated the risk of staff attrition, resulting from another year of bad morale and poor compensation.  The Company also said it may see additional employee resignations since these events have undermined employee morale.

On the business side, revenues from the Company's credit products group (over 50% and 46% of core revenue and earnings) have been affected by the recent departure of 20 sales and trading professionals from the group.  Some of the Company’s trading customers have reduced or suspended trading activities with GLCH, and it has seen a decrease in its new investment banking mandates partly due to the "perceived instability" of its business.  Finally, the Company said it experienced a significant decline in revenue in the first quarter of 2013.  Consequently, the Company’s stability and strategic direction are being questioned by investors as the stock now sells for under a dollar.

To make matters worse, GLCH is now setting up for a proxy battle later this spring with activist investors.  According to reports, activist hedge fund Clinton Group Inc. plans to nominate its own slate of directors to compete with a slate put forward in February by MP.  On March 26, 2013, Gleacher announced it had received a letter from Clinton Group asking that it reopen the period during which shareholders can submit proposals for director nominations, a window that closed February 23, 2013.  Gleacher said it extended the nomination deadline until 5 p.m. April 8, 2013.  Greg Taxin, a managing director at Clinton, said the firm decided to approach Gleacher because “we thought it was important to allow shareholders a choice to the MatlinPatterson plan, and what we believe to be a viable and good choice.” Clinton has yet to propose a plan.

 Exhibit 5: GLCH Balance Sheet and Excess Capital Analysis

Source: Company reports.

Balance Sheet Exposure

During the past several years, the Company has restructured certain components of its operations, reducing balance sheet exposure.  The Company’s recent sale of ClearPoint released $190 million in off-balance sheet obligations associated with a ClearPoint loan and secured borrowing.  We believe that the Company will continue to take its balance sheet leverage down over the next few quarters.  The Company has stated that they are “migrating” toward a smaller balance sheet.  Even with a pick-up in customer trading volumes, GLCH expects to be more advisory focused and thereby require less capital for its business operations.  Therefore its goal would be to use less capital in the future and act more as an agency than a principal trader.

Over the last four quarters, the Company has decreased both total assets and liabilities (see Exhibit 6 and Exhibit 7) because the Company has not been able earn adequate returns on its capital.  FBRC implemented a similar strategy when it could not earn adequate returns.  We believe this strategy is defensive and adequate to avoid unneeded loss exposure. 

Exhibit 7: GLCH Equity to Assets

Separately, the Company has approximately $46 million in federal net operating loss carry-forwards, which expire between 2023 and 2032.  The Company has set a 100% valuation allowance against this asset.  We believe that any return to profitability should allow this asset to be utilized, subject to a section 382 limitation. 

No Debt

As of December 31, 2012, GLCH has little to no non-operational debt.  It currently has approximately $600K of subordinated unsecured debt.  The only large obligations outstanding are off-balance sheet leases of $69 million, which run through 2025.  As a result, we believe that bankruptcy will be remote, and the key issue keeping the stock price depressed will come from operational losses. 

Trading Below Liquid Working Capital

We believe that the Company has net liquid capital of approximately $131 million or $1.07 per share (see Exhibit 11 and Exhibit 10), which is a 78% premium to current trading levels.  We believe that this liquid net asset value per share should act as a potential intrinsic value floor to valuation, because it represents the amount of real cash accessible to the Company.  We see this figure as a representation of the Company’s true net working capital position. 

Potential Sale of Business – Accretive Acquisition to Buyer

We believe that an acquisition may be the most likely outcome for GLCH.  In fact, M&A activity in the boutique investment banking industry has recently been strong (e.g. Jefferies, Duff and Phelps, Dahlman Rose, KBW, etc.).

At current levels an acquisition of GLCH would be highly accretive to a larger institutional broker dealer with trading and advisory platforms.  The advisory business should theoretically easily move (i.e. keeping star employees) to a better platform.  Furthermore, broker dealers with strong trading operations (e.g. Raymond James, LPL, Stifel, and Interactive Brokers) could pick up the trading businesses at a substantial discount and manage any liquidation of its assets and liabilities.  We believe that a partial or entire liquidation of net assets is what a strategic buyer may most likely desire.  In fact, at current price levels an acquirer would be receiving a large option value on any of the trading and advisory operations as going concerns. 

Moreover, we believe that there is enough liquid cash for a deal to be self-funded (i.e. borrow nearly the entire purchase price against liquid assets on GLCH balance sheet).  Therefore, we believe that a deal could be struck nearer tangible book value per share, which we believe to be the ultimate ceiling price to an acquirer. 

New Board and Reverse Stock Split

As mentioned above, four current board members announced that they would not seek re-election at GLCH’s next annual meeting.  Rather, MP has identified alternative candidates for shareholder approval.  Furthermore, Clinton is potentially attempting to push its own board nominees and strategic plan.  Regardless on which board members and plan are ultimately elected, there should be more strategic clarity/resolution going forward. 

The Company has renewed its share repurchase program, which should allow it to buy back its stock at discounted prices.  GLCH has also started the process of a reverse stock split to avoid a delisting from NASDAQ.  We believe that these corporate actions should positively influence the stock.  Moreover, larger repurchases below liquid net asset value should be highly accretive to shareholders and reinforce ROEs if/when the Company returns to profitability. 

Share Buybacks

We believe that tangible book is still fairly liquid at $1.42 per share and any share repurchase would be accretive to shareholders.  Management has suggested in their last earnings call that their formal strategic review would consider looking at buying back its stock away from the already announced program ($10 million) in the form of a tender offer.  They said that it is a “bag of tricks” that they will look to use in addition to other strategic activities that can improve revenue and profitability.  Management is balancing the “one-time gain” associated with a share buyback at a discount to book versus buying/investing into its ongoing businesses.  However, the stock currently trades above a 55% discount to tangible book, which should make management hard pressed not to execute share buybacks and/or tender offers, similar to what has been happening over the last eighteen months at FBR &Co., Inc. (Nasdaq: “FBRC”). 

Negatives

Lease Obligations

The Company currently leases all of its office space.  The Company's lease for its current headquarters in New York, New York (approximately 84,000 square foot space) expires on April 30, 2025.  It has office locations as of December 31, 2012, as follows: New York, NY; Roseland, NJ; Westborough, MA.  According to its latest filings, the Company has approximately $69 million in long-term off-balance sheet lease obligations.  We believe that any liquidation or acquisition of the Company would need to consider this cost.  Nevertheless, we believe that there is enough excess cash at the Company to cover this obligation from a buyer’s perspective, which should help lease obligations to be a non-issue, assuming operational losses are mitigated. 

Earnings Outlook Uncertainty

We believe that the key to this investment will be determined on how fast management can stem losses/break-even in its core operations.  Revenues from the Company's credit products group (over 50% and 46% of core revenue and earnings) have been affected by the recent departure of 20 sales and trading professionals from the group.  Some of the Company’s trading customers have reduced or suspended trading activities with GLCH, and it has seen a decrease in its new investment banking mandates partly due to the "perceived instability" of its business.  Consequently, the Company’s stability and strategic direction are incredibly uncertain.

Cash Burn Could Continue

At current price levels, we believe that the market may be assuming that continued operating losses relating to both continued and discontinued operations are as large as $100 million (or $0.82 per share).  However, the Company has already realized approximately $124 million of restructuring losses, 80% of which has come from the complete write-down of goodwill.  Operating losses from continued operations in 2012 were ~$23 million.  Accordingly, we believe that operating expenses will need to drop by at least $23 million (or $0.19 per share), in order to break-even (see Exhibit 9: Line items 29+31+34).  This calculation assumes $150 million of continued revenue, which excludes ClearPoint, and $32 million in net overhead expenses.  We believe that management may be able to make steady progress towards profitability this year.  See “Earnings Outlook” for more detail.

Proxy Battle Could Delay Process

As mentioned, on March 20, 2013, activist shareholder Clinton Group Inc. asked GLCH to reopen the period during which stockholders may submit proposals for nominations to the Company's board so that Clinton could submit their own set of board nominations.  We believe this may set up the Company for a proxy battle later in May 2013, if Clinton and MP cannot agree to strategic direction, which may delay progress toward a healthier outlook. 

Employee Morale and Retention

In order to operate its business successfully, GLCH relies on key professionals.  The recent loss of key senior professionals has impaired the Company’s ability to generate revenues and will make it more difficult to operate profitably.  For example, in February 2013, approximately 20 professionals in the Credit Products division resigned and began working for a competitor.  In addition, there have also been approximately 70 departures in its MBS & Rates division since April 2012.  Subsequently, these latter departures have been replaced by the hiring of approximately 50 professionals.  In addition, over the past three years, GLCH has experienced significant turnover of its senior management, including multiple chief executive and chief financial officers, as well as various division heads.  

We believe that these events have weakened employee morale, which may lead to further difficulties in retaining talent, going forward.  Turnover has resulted in disruptions, inefficiencies in operations and greater amounts of resource allocations to recruiting.  Boutique investment banking is already facing one of the fiercest recruiting environments.  We believe that a higher compensation ratio level may remain elevated over the next two years (on a standalone basis) in an effort to “protect the franchise” in what may continue to be “tough revenue years” for GLCH, and the industry overall. 

Earnings Outlook

Earnings Outlook Uncertainty

We believe that the key to this investment will be determined by how fast management can stem losses/break-even in its core operations.  As mentioned above, revenues from the Company's Credit Products group (over 50% and 46% of core revenue and earnings) have been affected by the recent departure of 20 sales and trading professionals from the group.  Some of the Company’s trading customers have also reduced or suspended trading activities with GLCH, and it has seen a decrease in its new investment banking mandates partly due to the "perceived instability" of its business.  Consequently, the Company’s stability and strategic direction remain uncertain.

The Company has incurred operating losses of approximately $53 million, $64 million and $26 million for the years ended December 31, 2012, 2011 and 2010, respectively (see Exhibit 8).  Moreover, the recent events described above (i.e. key personnel departures/firings) have caused a significant decline in revenue in the first quarter of 2013.  The Company has admitted that it cannot predict when, or if, it will be able to return to profitable operations.

At current price levels, we believe that the market may be assuming that continued operating losses relating to both continued and discontinued operations are as large as $100 million (or $0.82 per share).  However, the Company has already realized approximately $124 million of restructuring losses, 80% of which has come from the complete write-down of goodwill.  Operating losses from continued operations in 2012 was approximately $23 million.  Accordingly, we believe that operating expenses will need to drop by at least ~$23 million (or $0.19 per share), in order to break-even (see Exhibit 9: Line items 29+31+34).  This calculation assumes $150 million of continued revenue, which excludes ClearPoint, and $32 million in net overhead expenses.

Exhibit 8: GLCH Historical Financial Performance

Source: Company Filings, SNL, Capital IQ

Analyzing Gleacher’s expected “continuing” operations demonstrates not only a less capital intensive business but also a less people intensive business.  Total employees stand at 220, which is over a 50% decrease since December 2011 of 453 employees.  Outside of advisory – its most profitable segment – the business has lost a majority of employees.  The Rates segment, for example, has turned into more of a passive operation, with the majority of its revenue expected to come through net interest income vs. principal transactions.  Principal transactions are generally more personnel compensation intensive.  Analyzing the Credit Products segment, which has experienced the most employee turmoil, shows that commissions are the largest portion of its revenue stream.  We believe that as the business turns more agency-like, commissions and compensation expenses should come down. 

Valuation

We believe that the investment merit in GLCH should come primarily from buying a “net-net” opportunity in a Company trading substantially below its liquid net asset value (or net working capital).  Earnings power is secondary in determining investment merit for Gleacher.  We believe that the urgency of MatlinPatterson to divest of its GLCH position, coupled with greater transparency into the business and balance sheet should resolve this investment opportunity over the next 18 months.

Exhibit 11: GLCH Excess Capital per Share Analysis

Exhibit 12: Broker-Dealer Public Comparables

The Company has excess capital (including illiquid assets and excluding long-term leases) and tangible book of approximately $1.52 per share and $1.42 per share.  If we include operating leases, these figures drop to $1.05 and $0.94 per share.  From a net liquid capital perspective, the Company has approximately $131 million or $1.07 per share (see Exhibit 10), which is a 78% premium to current trading levels.  From an investment perspective, we believe that net liquid cash per share should act as a potential intrinsic floor to valuation for any acquirer.  Positing curtailment in operational losses, we believe that even under conservative discounted assumptions, the stock is trading at a considerable discount to TBV, net excess capital and net liquid assets per share.  We should note that we gave full “liquidity” credit to the majority of GLCH’s level 2 assets which are primarily Agency MBS and Federal Agency Obligations.  We believe that in today’s market, these assets should be sufficiently liquid, despite having less active markets versus level 1 categorized assets.  In addition, we give very little credit to the Company’s earnings power in evaluating the investment merit of GLCH.  Given its long history of disappointing results, we believe that any sign of potential operational loss mitigation should allow the stock to rally from current levels and trade at least to its liquid net asset/cash value. 

However, we believe a brief earnings power analysis might be helpful if simply from the perspective of what an investor would need to believe for the stock to trade back to TBV per share, barring an announced sale of GLCH.  Firstly, we must assume that most of the Company’s large exceptional losses are behind it, and management can rein in existing loss excesses.  Secondly, the Company has targeted 10% operating margins for the consolidated business, which we assume should be reached.  Thirdly, most of GLCH’s fixed cost is compensation.  A large portion this cost is contained within its “Other” segment, which is primarily corporate overhead.  We believe that this figure could be readily fixable with a new focused management and Board. 

On the revenue side, we believe that at least 25% of commissions will fade away within the Credit Products business, while the Rates segment revenues should remain at 2012 levels, the lowest they have been in the last three years.  With diminishing principal transaction revenue from both Credit Products and Rates, we believe that this outline of revenue could more/or less represent go-forward normalized earnings.  The Company’s Investment Banking segment is a little more uncertain to determine.  With the loss of Eric Gleacher, this business may have a harder time recruiting/retaining talent.  However, this segment has been heavily hiring with the additions of Randolph H. Barker (former head of FICC at Citigroup) and others in the 2H2012.   The Company also has one of the highest compensation to revenue ratios in the industry, which we believe may not be lowered anytime soon.  The investment banking advisory/capital raising segment is a higher margin business and should be able to reach profitability.  

Interesting, according to regulatory filings, Eric Gleacher will be paid $2.5 million to $3.5 million for the completion of the Lehman Archstone deal.  The deal was capped at $15 million.  Therefore, we think there will be an additional $7.5 million coming in the 2Q of 2013, since the payment to Eric Gleacher will be paid on May 31, 2013. 

We also assume that the Company is able to buy back its stock of at least $55 million at $1.20 per share (near Stifel’s alleged revised offer price), to achieve at least a 10% ROE.  On the last earnings call, CEO Thomas Hughes confirmed that the $45 million of cash on the balance sheet is completely unrestricted and could be used right away.  Therefore, we believe that a buy-back or dividend of $55 million could be entirely feasible.  However, we remain conservatively skeptical.

Nevertheless, if we plug-in these assumptions into a normalized earnings intrinsic value analysis, the stock could be worth at least $1.54 per share or 10x P/E (Exhibit 13), resulting in a ~61% discount to current.

We believe that a few catalysts exit, which may narrow the valuation gap between liquid net assets per share and existing prices.  However, the stock may remain volatile until these catalysts are realized.  Firstly, we believe that any clarity going into the 2013 Annual Meeting, surrounding new board members and last minute management shuffling, should help shareholders gain more confidence in the strategic direction of the Company.  It appears that MP believes strongly in a sale of the business, while new investors would look toward larger stock repurchasing assuming a sale could not achieve a similar economic outcome.  Therefore, a quick resolution should help release pressure on the stock.  We believe that there is reasonable upside in either scenario at current price levels.  Secondly, the strongest catalyst for the stock to recover will be stronger evidence toward a break-even year in 2013 and/or a return to profitability.  Thirdly, the Company faces potential de-listing at trading prices below $1 per share.  We believe that the Company will complete a reverse stock split.  We believe a reverse stock split will allow more exposure of this opportunity to additional institutional investors.  Finally, any large share repurchases should influence the stock upward. 

We should note here that what is happening at GLCH is similar to what has been happening at FBRC, over the last eighteen months.  FBRC, a competitor investment bank to GLCH, found itself in a similar troubled situation as it bore continued cash losses in its operations, which sank its stock price to all-time lows.  FBRC has recovered from these all-time lows by buying back $44 million of stock, doing a reverse split, increasing BVPS by 21% and thereby boosting its share price by 138%; mostly by fixing its cost base and buying back shares.  FBRC did little to improve operations materially.  We believe that a similar playbook, with similar results, could be executed by GLCH. 

Recommendation

The Company’s recent turmoil has created a buying opportunity in what appears to be, at first glance, a “hairy” outlook for the business.  Although we believe that the fall in the stock price was highly warranted, we appreciate that GLCH’s balance sheet has become cleaner and more transparent.  Furthermore, we believe that management and the Board are racing toward a break-even or better profit year in 2013.  This strategy should position the Company for a potential sale or at the very least the realization of a value closer to tangible book value per share, which is closer to the initial sale price offered for the business by Stifel in the summer of 2012. 

GLCH is currently trading at 44% discount to liquid cash.[2] We currently value GLCH’s stock at $1.07 per share.  Therefore, we are buyers of the stock at or below $0.60 per share.  We believe that there is an inherent intrinsic value floor of $1.00 per share, which reflects the approximate liquid cash component of net assets.  Our valuation omits any credit for improving earnings power of the business.

Risks

Firstly, we believe that there will be losses reported in 1Q 2013, which could place strong downward pressure on the stock, potentially creating more buying opportunities.  Nevertheless, we believe that management and the Board are determined to reach break-even and/or profitability in 2013, which should come on the back of potential share repurchases. 

Secondly, we believe that any proxy battle between MP and Clinton (or similar activists) could delay strategic execution of value realization, such as share repurchases, cost cutting initiatives, or a sale of the Company.

Thirdly, if management cannot stem losses in 2013, we believe that the stock could fall further.  However, losses to TBV would need to be as large as $100 million (or $0.82 per share) for TBV to assume current price levels.  Furthermore, net “operational” losses, which exclude restructuring and impairment charges, totaled ~$23 million in 2012 (or $0.19 per share).  We believe that the largest losses should be behind the Company, as it has strived to “de-risk” its balance sheet.  Therefore, we believe that if the Company should sustain similar operating losses it would only slightly impair the gap between current price levels and intrinsic value.  Nevertheless, we believe that if losses are larger than 2012 levels, then closing of the value gap would be delayed. 

Lastly, given the stock’s illiquidity and trading levels below $1.00 per share the stock could experience extreme instances of price volatility over the next few months.  We believe that caution would need to be made to adequately purchase a position.

Follow-up Questions for Management

Appendix 1:

Brief Historical Timeline

1. The Company was founded in 1985 as First Albany Companies Inc., a small investment bank and broker-dealer. 
2. May 2004, the Company acquires Descap Securities Inc. establishing the Company’s MBS and Rates business.
3. September 2007, the Company completes sale of its Municipal Capital Markets business; closes MatlinPatterson recapitalization (net proceeds of $46 million) and rebrands the Company as Broadpoint Securities Group, Inc.  New management is put in place. 
4. March 2008, the Company hired the employees of the fixed income division of BNY Capital Markets, Inc., establishing GLCH’s Credit Products business.
5. October 2008, the Company completes the acquisition of American Technology Research, Inc.
6. June 2009, the Company acquired Gleacher Partners, an independent advisory firm.  The combined firm was renamed Broadpoint Gleacher Securities Group, Inc. Having survived financial market meltdown, the combined entity faced a dramatically altered the competitive landscape. It was assumed that there would be opportunities for the surviving firms to increase their market share, especially in equities, which were limited to the technology vertical at the time, and in investment banking, through the acquisition of Gleacher Partners.  The combined firm targeted $500 mil. in annual revenue and pretax margins of 20%. Eric Gleacher became chairman of the Company.
7. 4Q 2009, current management had grown revenue significantly (from $40.1 million in 2007 to $318.6MM in 2009) and net income from $(19.5) million to $54.9 million.
8. In February of 2010, Chairman Eric Gleacher assumes role of CEO following resignation of then CEO Fensterstock. The Company proceeds to change its name to Gleacher & Company, Inc. and reincorporates in Delaware.
9. December 2010, the Company ends its year with a $(20.6MM) earnings loss.
10. January 2011, the Company acquires ClearPoint Funding, Inc.
11. April 2011, Thomas J. Hughes appointed CEO and a strategic plan announced in August 2011 which included exiting the equities business and realigning the investment banking division.
12. June 2012, the Board of Directors unanimously adopted a resolution appointing a Special Committee of independent Board members to review strategic alternatives.  Accordingly, executive officers of the Company (i.e., Thomas Hughes and Eric Gleacher) and/or significant shareholders or their representatives (i.e., Matlin-Patterson and Eric Gleacher) were disqualified from serving.
13. January 2013, Eric Gleacher resigned as board chairman and as an officer and director of the Company.
14. February 2013, Closed the sale of Clearpoint Funding Inc. to Homeward Residential Inc., a wholly owned subsidiary of Ocwen Financial Corp.
15. February 2013, four directors (Henry S. Bienen, Robert A. Gerard, Bruce Rohde and Robert S. Yingling) informed the Company that they do not intend to stand for re-election at the Company’s 2013 Annual Meeting of Stockholders.
16. March 2013, Activist shareholder Clinton Group Inc. asked Gleacher to reopen the period during which stockholders may submit proposals for nominations to the Company's board so that Clinton could submit their board nominations.

Catalyst

1) Clarity going into the 2013 Annual Meeting, surrounding new board members and last minute management shuffling.  A quick resolution should help release pressure on the stock.