Plus500 Shares Rebound After £101.3M Share Repurchase
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Plus500 has closed the purchase of over 7.3 million ordinary shares that belong to Odey Asset Management LLP. The acquisition has been set at around £101.3 million, and it represents around 8.2% of the total issued share capital at the company.
Plus500 closes a £101.3M share repurchase
The purchase closed by the publicly-listed trading company meets its goals on capital allocation and the shareholder return policy. The newly acquired shares are being held within the company’s treasury.
The company’s board has said that the share repurchase from Odey Asset Management was in the best interest of all the shareholders. At the end of March this year, the company had cash balances of over $950 million.
The company has purchased 7,327,605 shares at 1,383 pence per share, with the total spent amount being £101.3 million. The shares were purchased at their lowest price in over a year, but the price remains high. The shares have gained by 250% over the past three years.
“The purchase has been conducted separately from the Company’s latest share buyback programme to purchase up to $70.0 million of the Company’s Ordinary Shares, announced on 14 February which will continue as planned,” Plus500 said.
As at June 12, 2023, Plus500 had repurchased around $52 million worth of ordinary shares at the company. The purchase met the goals of the Share Buyback Programme being run by the company. After the acquisition, the total voting rights at Plus500 will be 82,512,335. It now has a total of 32,376,042 shares in its treasury.
The share buyback appeared to inspire investor confidence as the company shares at the London Stock Exchange increased by 8.5% to reach an intraday high of 1,514 pence. However, they have dropped to around 1,478 pence.
The loss of these shares since the start of 2023 is around 17%. The gains are notable compared to other brokers. IG Group has gained by 10% within the same period, while CMC Markets has dropped by 28%. This places IG Group among the top gainers.
Plus500 explores options for a US listing
Plus500 is exploring the available options to have its stock listed in the US. However, the company is yet to confirm this move, but reports have suggested that it is being triggered by concerns among the broker’s management about the valuation of the company.
The broker revealed its financial results for the first quarter of 2023, which exposed revenue of $207.9 million, and an EBITDA of $100.9 million. Analysts estimate that the broker will hit revenues of $601.2 million in the current year, with the EBITDA expected to reach $266.9 million.
Plus500 is also growing its operations across the United States. The company first ventured into the US in 2021 following the acquisition of the Cunningham Commodities and Cunningham Trading Systems. During the third quarter of last year, the company unveiled a proprietary future trading platform targeting consumers based in the United States.
