INTL FCStone 2011 Annual Report Download - page 34

INTL FCSTONE INC.Form10K20
PARTI
ITEM 1A Risk Factors
We cannot assure you that we will be able to compete e ectively
with current or future competitors or that the competitive
pressures we face will not have a material adverse e ect on our
business,  nancial condition and operating results.
Our business could be adversely aff ected if we are
unable to retain our existing customers or attract
new customers
 e success of our business depends, in part, on our ability to
maintain and increase our customer base. Customers in our
market are sensitive to, among other things, the costs of using
our services, the quality of the services we off er, the speed and
reliability of order execution and the breadth of our service
off erings and the products and markets to which we off er access.
We may not be able to continue to off er the pricing, service,
speed and reliability of order execution or the service, product
and market breadth that customers desire. In addition, once
our risk management consulting customers have become better
educated with regard to sources of risk and the tools available
to facilitate the management of this risk and we have provided
them with recommended hedging strategies, they may no longer
continue paying monthly fees for these services. In addition, the
bankruptcy fi ling of MF Global and its disclosure of a potential
defi ciency in customer segregated futures accounts may negatively
aff ect the perception of our industry and our ability to retain
existing customers or attract new customers. Furthermore, our
existing customers, including IRMP customers, are not generally
obligated to use our services and can switch providers of clearing
and execution services or decrease their trading activity conducted
through us at any time. As a result, we may fail to retain existing
customers or be unable to attract new customers. Our failure
to maintain or attract customers could have a material adverse
eff ect on our business, fi nancial condition and operating results.
We rely on relationships with introducing brokers
for obtaining some of our customers
 e failure to maintain these relationships could adversely aff ect
our business. We have relationships with introducing brokers
who assist us in establishing new customer relationships and
provide marketing and customer service functions for some of
our customers.  ese introducing brokers receive compensation
for introducing customers to us. Many of our relationships with
introducing brokers are non-exclusive or may be canceled on
relatively short notice. In addition, our introducing brokers
have no obligation to provide new customer relationships or
minimum levels of transaction volume. Our failure to maintain
these relationships with these introducing brokers or the failure
of these introducing brokers to establish and maintain customer
relationships would result in a loss of revenues, which could
adversely aff ect our business.
Certain provisions of Delaware law and our
charter may adversely aff ect the rights of holders
of our common stock and make a takeover of us
more diffi cult
We are organized under the laws of the State of Delaware. Certain
provisions of Delaware law may have the eff ect of delaying or
preventing a change in control. In addition, certain provisions of
our certifi cate of incorporation may have anti-takeover eff ects and
may delay, defer or prevent a takeover attempt that a stockholder
might consider in its best interest. Our certifi cate provides for
a staggered board, so that it would take three successive annual
meetings to replace the entire board of directors. Our certifi cate
of incorporation authorizes the board to determine the terms of
our unissued series of preferred stock and to fi x the number of
shares of any series of preferred stock without any vote or action
by our stockholders. As a result, the board can authorize and
issue shares of preferred stock with voting or conversion rights
that could adversely aff ect the voting or other rights of holders of
our common stock. In addition, the issuance of preferred stock
may have the eff ect of delaying or preventing a change of control,
because the rights given to the holders of a series of preferred
stock may prohibit a merger, reorganization, sale, liquidation
or other extraordinary corporate transaction.
Our stock price is subject to volatility
 e market price of our common stock has been and can be
expected to be subject to fl uctuation as a result of a variety of
factors, many of which are beyond our control, including:
•actual or anticipated variations in our results of operations;
•announcements of new products by us or our competitors;
•technological innovations by us or our competitors;
• changes in earnings estimates or buy/sell recommendations
by fi nancial analysts;
• the operating and stock price performance of other companies;
• general market conditions or conditions specifi c in specifi c
markets;
• conditions or trends aff ecting our industry or the economy
generally;
• announcements relating to strategic relationships or acquisitions;
and
• risk factors and uncertainties set forth elsewhere in this
Form10-K.
Because of this volatility, we may fail to meet the expectations of
our stockholders or of securities analysts, and the trading prices
of our common stock could decline as a result. In addition, any
negative change in the public’s perception of the securities industry
could depress our stock price regardless of our operating results.