Cantor Fitzgerald's Strategic Transition Unlocks Hidden Value in BGC and Newmark: A Buy at These Levels

The leadership transition at Cantor Fitzgerald, L.P.—driven by Howard Lutnick’s ethical compliance-driven exit as U.S. Secretary of Commerce—has transformed into a catalyst for unlocking undervalued opportunities in its two key affiliates: BGC Partners (BGC) and Newmark Group (NEW). With ownership now transferred to trusts controlled by the next generation of Lutnick leadership and bolstered by strategic minority stakes from seasoned investors like 26North and Oak Hill Advisors, both stocks present a rare buy-at-discount scenario. Here’s why investors should act now.

Stabilizing Ownership: Trusts and Minority Stakes Reduce Governance Risks

Howard Lutnick’s exit required him to divest all economic and voting interests in Cantor Fitzgerald and its affiliates by May 16, 2025. Instead of diluting control, his shares were transferred to trusts benefiting his children, Brandon and Kyle Lutnick, who now lead Cantor as controlling trustees. This ensures continuity of the firm’s 80-year legacy while adhering to federal ethics rules.

Crucially, the transition welcomed minority stakes from 26North (led by Josh Harris, a master of value creation) and Glenn August of Oak Hill Advisors, both of whom have proven track records in turning undervalued assets into winners. Their participation signals confidence in the next-gen leadership’s ability to capitalize on emerging sectors like digital assets and financial technology.

Stock Repurchases at Discounts: BGC and NEW Are Priced to Perfection

The divestiture triggered strategic repurchases of Lutnick’s stakes by BGC and Newmark at prices that now look undervalued:

• BGC: Repurchased 16.4 million shares at $9.21 per share, totaling $151.5 million. This price aligns with the volume-weighted average between May 14–16, 2025.
• Newmark: Bought back 11 million shares at $11.58 per share, consistent with its May 17 closing price.

These transactions, totaling $361 million, were executed at prices that now appear below intrinsic value. For context, BGC’s shares surged 2.04% post-announcement, signaling investor optimism. Meanwhile, Newmark’s valuation fundamentals—particularly its dominance in resilient sectors like multifamily housing—remain underappreciated by the market.

Why the Undervaluation? And Why Buy Now?

1. Controlled Structures, Unshaken Influence:
   Cantor Fitzgerald retains controlling stakes in both BGC and Newmark, ensuring strategic alignment and operational stability. This is critical in volatile markets, as Cantor’s leadership has consistently outperformed peers during downturns (e.g., post-9/11 resilience).

2. Minority Investors with a Value Lens:
   Josh Harris’s 26North and Glenn August’s Oak Hill Advisors are known for identifying undervalued assets. Their stakes in Cantor and its affiliates suggest they see long-term upside in BGC’s global brokerage platform and Newmark’s real estate advisory dominance.

3. Discounted Repurchases Signal Buying Opportunity:
   The repurchase prices were set at or below recent trading averages, creating a floor for both stocks. For BGC, the $9.21 repurchase price is 15% below its 52-week high of $10.80, while Newmark’s $11.58 price is 20% below its 2023 peak.

4. Tax-Efficient Transition Removes Uncertainty:
   Lutnick’s divestiture, structured to avoid capital gains taxes via reinvestment in “qualifying instruments,” eliminates lingering regulatory risks. This clarity is a tailwind for investor confidence.

The Case for a Buy Rating: BGC and NEW Are Priced for Growth

• BGC (BGC):
  With a P/E ratio of 6.2x (vs. 11x for peers) and $1.5 billion in cash, BGC is positioned to capitalize on rising M&A activity and digital asset adoption. Its repurchase at $9.21 offers 30% upside to a $12 price target based on historical multiples.

• Newmark (NEW):
  Trading at 0.8x book value, Newmark’s valuation lags its $1.2 billion in net operating income and strong fundamentals in multifamily and industrial sectors. A 15% re-rating to 1.0x book value would push shares to $14—21% above current levels.

Conclusion: Act Now—These Stocks Are Too Cheap to Pass On

The Cantor Fitzgerald transition has eliminated governance risks, stabilized ownership, and priced BGC and NEW at levels that ignore their structural advantages. With minority investors backing the next-gen leadership and repurchases at discounts, both stocks are buy candidates at current levels.

BGC Target Price: $12 (30% Upside)
NEW Target Price: $14 (21% Upside)

Investors who act now gain exposure to two undervalued giants with a clear path to growth—a rare opportunity in today’s market.

Disclosure: This analysis is for informational purposes only. Consult a financial advisor before making investment decisions.