Rodman & Renshaw: name change reflects move toward technology, away from investment banking

By Lisa Kerner

Charlotte, N.C., May 15 - Rodman & Renshaw Capital Group, Inc. announced it will change its name to Direct Markets Holdings Corp. on June 1 and expects to begin trading on NASDAQ under a new ticker symbol, "MKTS."

The name change reflects the company's February introduction of the DirectMarkets platform, an automated state-of-the art electronic transaction platform that directly links existing public company issuers and investors seeking to transact primary offerings of securities.

"As a result of our new business strategy of providing technology solutions to the financial services industry, and to maximize the value of its legacy investment banking business, we are assessing and exploring strategic alternatives for our investment banking business," said chief executive Ed Rubin during a conference call on Tuesday.

Kevin Lupowitz, the chief executive officer of Direct Markets, Inc., the subsidiary company that has been developing the platform, will become the CEO of the parent company on Sept. 1. Lupowitz will also become a member of the Direct Markets board of directors.

Board changes

The reposition to a technology-focused business has resulted in other changes to the board. General Wesley Clark has stepped down as chairman and as a member of the board. Anthony Sanfilippo has also stepped down from the board, but will remain as president.

Winston Churchill was appointed chairman of the board.

"In the coming months, as we prepare to commercialize the DirectMarkets platform, we expect to expand our board of directors to include members with experience in disciplines related to the DirectMarkets business, including the financial technology sector, to provide expertise and leadership in these areas," Rubin said.

Financial highlights

Also on the call, chief financial officer Dave Horin reviewed Rodman & Renshaw's first-quarter results.

Liquid assets were about $17 million as of May 11, compared to $19.9 million as of March 31. The decrease was attributed to reduced investment banking revenue and the continuing development of the DirectMarkets platform.

Rodman & Renshaw repurchased about 599,000 shares of its common stock at an average price of $0.88 during the quarter.

The company reported non-GAAP operating net income of $1.8 million, or $.05 per dilutive share, and investment banking revenue of $23.5 million.

"For the first two months of 2012, we generated approximately $21.5 million in investment banking revenue and closed 17 transactions, including the Zsa Zsa Energy Transaction where we received a cash fee of $11.7 million," Horin said.

However, in March the company only generated $2.0 million in investment banking revenue and only $1.4 million of investment banking revenue in the first six weeks of the second quarter.

Rodman & Renshaw no longer focuses on the metals and mining or oil and gas sectors.

"We continue to focus our investment banking efforts in the healthcare and technology sectors," said Horin.

Sagient Research ranked the company the number one investment bank in PIPE and registered direct transactions by deal volume for the first quarter of 2012.

Despite a number of potential deals in its transaction backlog, Horin said it is difficult to determine when the company will be able to monetize any of them.

Brokerage revenue for the first quarter was approximately $6.5 million compared to $6.2 million, for the fourth quarter of 2011.

Rodman & Renshaw is a holding company based in New York. Its subsidiaries include investment bank Rodman & Renshaw, LLC, Rodman Principal Investments, LLC and Miller Mathis & Co., LLC.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.