NEW YORK ( TheStreet) -- MF Global Holdings ( MF), a foreign exchange and derivates brokerage, is among the biggest market winners on Wednesday, with a 12% gain at midday.

After the market closed on Tuesday, MF Global announced that it had hired former New Jersey Governor and Goldman Sachs ( GS) head John Corzine as its chairman and chief executive, effective immediately.

On Wednesday, more than 13 million shares of MF Global were traded at midday, versus an average daily volume of 1.5 million shares.

After the announcement, MF Global's stock popped more than 11% to $7.32 in the after-hours session Tuesday.

Current CEO Bernard Dan has resigned from MF Global for "personal reasons," the company said in its statement announcing Corzine's hiring.

Corzine's contract includes an initial base salary of $1.5 million; a sign-on bonus of $1.5 million; a target cash bonus of $3 million for the fiscal year ending March 31, 2011 -- based on individual and corporate performance goals and subject to a minimum bonus of $2 million; and a stock option to purchase 2.5 million shares of MF Global common stock.

Analysts are divided on the outlook for MF Global, with the harshest assessment coming from the debt side of the research universe.

Alexander Yavorsky, an analyst at Moody's Investors Service, indicated that Corzine has his work cut out for him. In a note Tuesday afternoon, the Moody's analyst said potential concerns about the unexpected nature of the leadership change are "tempered by Mr. Corzine's decades of first-rate industry leadership." Still, Yavorksy said, MF Global remains a long way from having its problems solved.

"The more important question is -- what will new management do to return MF Global to consistent, long-term profitability while keeping its risk appetite in check?" Yavorsky asked. He added that the firm's recent performance has suffered from a decline in trading volumes. Also, an "abnormally low interest rate environment" has led to increased leverage on MF's balance sheet.

The unexpected nature of the change -- which might lead some market watchers to conclude that former MF Global CEO Dan was forced out -- were countered by equity analysts, who said that MF Global had made progress in the past year under Dan's leadership, even if in the last quarter MF Global remained unprofitable.

What's more, the 8-K filed by MF Global on Tuesday did not indicate a large severance payment being made to Dan that might have indicated a forced resignation. Dan was a high-profile hire for MF Global also, having previously headed the Chicago Board of Trade.

Ticonderoga Securities analyst Chris Allen, who rates MF Global as a buy, wrote in a research note, "We believe that MF was headed in the right direction under CEO Bernie Dan, who played an integral role in rescuing the company after numerous missteps in 2008 and had established a solid strategy."

Keefe, Bruyette & Woods analyst Niamh Alexander agreed, writing in a research note, "Outgoing MF CEO Dan has already laid the groundwork to diversify MF beyond its foreign cash management business into more of the institutional broker dealer type operations." The KBW analyst believe that Corzine's hiring, and his rolodex, could accelerate this strategy.

MF Global shares have struggled, but the company's worst period may be behind it. After an initial public offering that led the stock to rise above the $30 mark in 2007, MF Global shares fell under the $2 mark in late 2008.

MF Global has paid down $1 billion debt since March 2008 and currently has $647 million in total debt outstanding, according to KBR research and MF Global data. MF Global's CFO Randy MacDonald told KBW on Tuesday that completely de-levering its balance sheet in the long-term is not unreasonable.

MF Global is still not profitable, but its positioning seems less critical than it once had been, according to equity analysts. MF Global shares were at $8.19 after its near-12% gain at midday on Wednesday, or a gain of 87 cents. MF Global's 52-week high was hit on Wednesday morning at $8.42.

MF Global's road to sustained profitability is not clear, though, and exogenous factors like the interest rate environment will continue to play an important role.

MF Global provided revenue guidance on Tuesday for the fiscal fourth quarter of 2010 of $235 million to $245 million, lower than KBW's expectation of $270 million in revenues.

KBW lowered its fourth quarter 20201 earning per share estimate to a loss of two cents, from a six cent per share gain, and for the full year 2010, KBW's earnings per share estimate as for a break even year, versus an 8 cent gain.

KBW remains at an outperform and price target of $9 on MF Global shares.

Ticonderoga Securities lowered its estimate for fourth quarter earnings to 3 cents a share from five cents, and reduced its 2011/2012 earnings per share estimate to $0.35/$1.02, from $0.38/1.06.

"The fact that MF Global successfully recruited two guys with impressive track records for the CEO slot speaks to the company's potential. It's a sizable company with lots of clients and products in regions across the globe, even if today it does not have much in the way of profits," said one equity analyst.

-- Reported by Eric Rosenbaum in New York.

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