TIMELINE: The Demise Of Investment Bank Gleacher

Getty Images/Ross KinnairdEric Gleacher on the golf course.Beleaguered advisory boutique firm Gleacher & Co. shut down its investment banking business and hired a chief restructuring officer yesterday. 

The firm said in a release  that it had hired Christopher J. Kearns of Capstone Advisory Group to be the company’s Chief Restructuring Officer and CEO.  The bank also shut down its investment banking business effective immediately affecting 20 people. 

Gleacher said that it’s looking into several strategic options, including winding down the remaining operations or a possible merger or sale of the company. 

Just days before this news came out, the bank had sacked its entire summer intern class two days before they were supposed to start.  

Gleacher was founded by legendary dealmaker and avid golfer Eric Gleacher.  During the 1970s and 80s, he worked at Lehman Brothers and Morgan Stanley.  While at Morgan Stanley, he advised KKR’s in their leveraged buyout of RJR Nabisco, which was chronicled in the book “Barbarians at the Gate”.

He founded Gleacher & Co. in 1990.  It was later sold to another firm, but he bought it back in 1999.  He then sold the company to Broadpoint Securities in 2009. 

Gleacher, 73, left his post as chairman of his namesake firm back in January of this year.  

“We will continue to grow our M&A and capital raising capabilities in line with the vision we have described previously, a vision that Eric helped author. On behalf of the Company, I want to wish Eric the best in his future endeavours,” Gleacher’s CEO Thomas Hughes said in a statement at the time.  

Not so fast. 

It has truly been a rough past two years for Gleacher & Co. They have exited businesses, fired hundreds of employees and posted a handful of earnings misses.  

Here’s a timeline of the events:  

  • April 18, 2011 — The company replaced its executive team and named Thomas Hughes the chief executive officer. 
  • May 5, 2011 — The company’s Q1 earnings results came right in line.  The company posted EPS of 4 cents. 
  • Aug. 2, 2011 — The company missed on Q2 earnings posting 2 cents per share versus analysts’ estimates of 3 cents. 
  • Aug. 22 , 2011 — A few months after Hughes took over as CEO, the company implemented a “new strategic plan” where it closed its equities trading business affecting 62 employees. 
  • October 27, 2011 — The company beat the Street’s Q3 earnings estimates.  They reported EPS of 2 cents versus.
  • February 9, 2012 — The company missed earnings estimates for Q4 2011.  Gleacher delivered an EPS of 2 cents versus estimates of 3 cents. 
  • May 3, 2012 — The company posted a loss of 3 cents per share in Q1 in 2012.  Analysts were expecting the bank to post EPS of 3 cents.
  • June 19, 2012 — Gleacher got a letter from Nasdaq notifying them that their stock could be delisted for falling below the $1.00 minimum closing price bid per share rule.  
  • Aug. 7, 2012 — For Q2, the firm reported a loss of 6 cents per share.  Analysts expected a loss of 1 cent.
  • Nov. 8, 2012 — The firm beat analysts estimates for Q3 of 2012 posting a loss of 2 cents versus a loss of 3 cents per share.
  • Jan. 29, 2013 — Eric Gleacher left his post as chairman so he could “focus on exciting business opportunities outside of the firm.” 
  • Feb. 15, 2013 — For Q4 of 2012, the bank posted a loss of 9 cents per share versus analysts’ estimates of a loss of 1 cent. 
  • April 10, 2013 — Gleacher exited fixed income and that affected about 160 people. The company also said that it was in talks “regarding a potential business combination” (a.k.a. merger). 
  • June 4, 2013 — The company exited the investment banking business affecting 20 employees.  They hired a restructuring officer and are exploring options of either selling the company’s assets or merging with another company. 

Since April 18, 2011, Gleacher’s stock has tanked more than 63%. 

“I just believe there are more equities and fixed income businesses who cannot reach critical mass and will fold. Margins are terrible and volumes are still shifting to automated venues,” a former boutique investment banker, who will remain anonymous, commented. 

Yahoo! Finance

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.