Plus500, a publicly listed trading company, has recently announced a significant acquisition of over 7.3 million ordinary shares from Odey Asset Management LLP. The purchase, valued at approximately £101.3 million, accounts for approximately 8.2% of the company’s issued share capital. These newly acquired shares will be held in Plus500’s treasury, in line with the company’s capital allocation and shareholder return policy.
According to a regulatory filing made today, Plus500’s board of directors believes that the acquisition from Odey Asset Management will serve the best interests of all shareholders. As of March 31, 2023, Plus500 reported robust financials, with cash balances exceeding $950 million. This strong financial position enabled the company to acquire the shares at an attractive price point.
The acquisition involved the purchase of 7,327,605 shares at a price of 1,383 pence per share, totalling £101.3 million. Although these shares were acquired at their lowest price in over a year, they remain relatively high compared to historical levels. For instance, three years ago, a single Plus500 share was priced at 397 pence, indicating a significant increase of 250% since then.
In a statement, Plus500 clarified that this purchase was separate from their existing share buyback program, which was announced on February 14. The company’s ongoing program aims to repurchase up to $70.0 million worth of its ordinary shares and will continue as planned. As of June 12, 2023, Plus500 had already repurchased approximately $52 million of its ordinary shares under the program.
Following the acquisition, Plus500’s total voting rights will amount to 82,512,335, and the company will hold 32,376,042 ordinary shares in its treasury. The news of the share buyback led to a positive response in Plus500’s listing on the London Stock Exchange. The company’s shares rebounded from their annual lows of around 1,383 pence, experiencing an 8.5% increase to reach an intraday high of 1,514 pence. While the company’s shares reached a record price of just below 2,000 pence at the beginning of 2023, they have since declined by 30%.
Valuation Frustration
According to recent reports, Plus500 is reportedly considering listing its shares in the United States as an alternative to its current listing on the London Stock Exchange. Although no official confirmation has been made, this potential decision is said to stem from management’s frustration with the company’s valuation.
In its financial report for the first quarter of 2023, Plus500 disclosed impressive figures, including revenue of $207.9 million and EBITDA of $100.9 million. Analysts’ consensus forecasts for 2023 anticipate revenue of $601.2 million, with an estimated EBITDA of $266.9 million and earnings per share of $2.43. It is noteworthy that Plus500 has no outstanding debt and closed the first quarter with a substantial cash balance exceeding $950 million.
Plus500 is actively expanding its presence in the United States. The company entered the US market in 2021 through the acquisition of Cunningham Commodities and Cunningham Trading Systems. To further establish its foothold, Plus500 introduced a custom futures trading platform designed specifically for the US market in the third quarter of 2022.
