MF Global Exploring Strategic Options (MF)

MF Global Holdings Ltd. (NYSE: MF), a New York City-based broker in markets for commodities and listed derivatives, is said to exploring its strategic options.

According to a report by the Wall Street Journal, MF Global has hired at least two investment banks to explore strategic options, including a possible sale. The move comes after the company’s shares fell sharply this week on unexpected second-quarter loss and rating downgrade.

The Journal, citing people with the knowledge of the situation, said that brokerage has hired Evercore Partners, along with another investment bank, to review its strategic options.

MF Global has had a tough week, with the company’s shares falling 53.8%. On Monday, ratings agency Moody’s Investors Service slashed the company’s debt rating on concerns about its exposure to European debt. Standard & Poor’s is also reviewing the company’s credit rating.

Following the rating downgrade on Monday, MF Global on Tuesday reported on unexpected loss for the second quarter, pushing the company’s shares down almost 50%. MF Global posted a loss of $191.6 million on Tuesday, as the company scaled back its trading activity due to volatility in the financial markets. MF Global shares continued to fall in trading today as investors feared about the company’s health. The stock ended 8.60% lower today.

The big worry investors currently have is MF Global’s exposure to European debt. Earlier today, the company’s Board voted to review strategic alternatives, including a possible asset sale, a merger or a sale of the entire business, the Wall Street Journal reported. Meanwhile, the company declined to comment on the issye.

MF Global’s weak performance in second quarter and worries about its liquidity position and exposure to European debt are expected to increase pressure on Jon Corzine, the company’s CEO and a  former Goldman Sachs (NYSE: GS) executive. Corzine, who joined MF Global in 2010, has been looking to transform the company into commodities and capital markets focused investment bank. However, Corzine’s planned transformation has not yielded any results yet.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.