Plus500 Share Discussion Threads

[saltraider] 30/10/2018 07:59

The last reported change was Kairos (up .12% on the 26th October) so it's hard to see why the reported total has increased today. That's why I'm confused and think that there may be errors creeping into the reporting.

[foolishben] 30/10/2018 07:48

Yes I noticed the increase in short positions this morning and was quite surprised. Do any of the more knowledgeable and sensible posters have any suspicions as to why at least 1 or 2 hedge-funds appear to have increased their shorts? I don't typically like to be on the wrong side of a short attack but I have made an exception with PLUS as I think they could be one of rare examples of a company that is completely misunderstood by the market, hedge funds and all. That said, after the solid post ESMA quarterly results and with the current high volatility in the market, I had expected some of the short positions to be unwound this week, not the other way around. At the current market cap and with all things considered, I don't see how they see any value in a short position, especially as PLUS seem to be coping just fine with the new regulations and are very likely about to have a good Q3. The only thing I can think of is the founders only agreed to a 90 day non sale period after their last sale. This ends in early December so perhaps the funds expect them to sell the rest at a discount at the earliest opportunity? Elcapital - No need to mention "the big thing", I am more interested in other, more coherent theories.

[saltraider] 30/10/2018 07:36

Yes, ElC, I noticed that ... and I think I also saw this higher value earlier in the month, although it was not evident in the last report you linked to. I'm not disputing the numbers but I can't see any recent change that would explain the increase of about 3/4%.

This slightly calls into question the reliability of the reported numbers ... although any errors could go either way, so it's not grounds for complacency.

[elcapital2018] 30/10/2018 06:47

10.02%

hxxps://shorttracker.co.uk/company/IL0011284465/

[saltraider] 28/10/2018 22:28

Yes, 9.48% and down from the peak value of 9.56% on the 17th October.

Over October as a whole, there's no clear trend upwards or downwards in Plus shorts (over 0.5%).

[gettingrichslow] 28/10/2018 21:25

El Cap, any luck getting a girlfriend this weekend?

[elcapital2018] 28/10/2018 20:58

9.48%

hItps://shorttracker.co.uk/company/IL0011284465/

[tomleafs] 28/10/2018 05:08

I have a few concerns regarding Plus that I’d appreciate getting some feedback on from the posters on this board. I should preface this by saying I’m a shareholder of Plus and was relatively pleased with the recent Q3 results. So my concerns are regarding the unnatural looking positive reviews on the app stores, the most obvious appearing to be the Google Play Store. What I mean by this is you have genuine looking paragraphs of people rating 1 star due to one issue or another, however there are swathes of one or two liner 4 or 5 star reviews that look completely fake to me. These look very much like the kind of review you can mass purchase in order to build up app ratings. Another related concern: I’m currently on a long-haul flight and wasted a bit of time flicking through a hundred or so reviews on both app platforms. The majority did not seem to be 4 or 5 star reviews yet the ‘overall’; rating for each platform is 4 stars. Now I know this was a small sample size but it made me wonder how these algorithms behind the scenes are working. Are they truly representing what people think? My final concern is Trading212 which appears to have a highly rated app with more genuine looking ratings and feedback than our company. I’m not sure why there is so much focus here on IG and not Trading212... it appears much more of a threat than IG does. If anyone has any thoughts on the above I’d be interested to read them. Also a quick thanks for the recent analysis we’ve had here from various posters. Good luck to all

[noujay] 27/10/2018 23:24

Anybody here know InterTrader and have any comments on them? I ask as they are owned by GVC and they seem to have embarked upon a meaningful marketing/ad campaign of late.Just out of interest.

[riverman77] 26/10/2018 17:26

Thanks for the reply. Sorry when I said
"the 3 months as a whole weren't perhaps that exceptional" I meant in terms of market volatitly, i.e volatitly wasn't exceptionally low over the 3 months as a whole.

In terms of how Plus performed over the 3 months I'd say it was very satisfactory given the headwinds of low volatitly and new esma regulations.

[rifleshot3] 26/10/2018 16:23

Riverman

-I didn’t just say vol was low in Sept, I said it was lower again in relation to core instruments that Plus trades. Another thing entirely. Important to be alert to that caveat
-2017 was “normalised221; volatility. It is established that the business traded solidly with normalised volatility Pre ESMA. The question is how will it trade with normalised volatility post?
-We can’t answer that yet, because we don’t have to! In October we’ve gone from low volatility to heightened volatility in the blink of an eye (a great thing if you’re long)
-If we wanted to try and answer, and it is only 1 month, but our best proxy is August. Post ESMA + normalised volatility = a good trading performance
-No one is saying “the 3 months were exceptional”. They were far from exceptional. But they were also far from the calamity the whole market expected given deplorable market back drop. That is the whole point
-Q3 AUAC is absolutely a metric that a bear could seize on. But I’m not so sure they should be too hasty
-The problem for the bears is that exceptionally high volatility muddies the waters horribly. Because it doesn’t just drive up immediate Top Line, EBIT, PAT, it also supercharges the KPI’s that underpin short and long term financial performance. EPC Process accelerates, new customer numbers rise, old customers re-activate and the economics of high AUAC (a long-term strategy anyway), start to bear fruit
- So it creates a nasty here and now, but also tail risk of a sort for the short, and the grim prospect of heightened revenues and profit for an unknown period of time
-For bear hedge funds that stand their ground, trying to sort out what earnings are volatility-related and what are better quality, as they pick through the ruins of their short position at the end of Q4, will be a pretty thankless task. Also dangerous (if they’re somehow still in) given how agile and intelligent Plus management have proved so far
-No view on Trading 212. I’ve never heard of them. Understand though that Plus are elephant hunting, with IG in their sights, they’re not nervously looking behind them

[riverman77] 26/10/2018 14:27

Thanks rifleshot for the detailed and insightful analysis. I agree with all you say but just to provide some balance there are a few things I'd also mention - would be interested to hear your thoughts.

Yes volatility was very low in September but it was also very low throughout the whole of 2017 when plus made ever increasing profits. Obviously cryptos were a big factor, but I think we can assume that revenue stream won't be coming back. Also August was quite volatile so the 3 months as a whole weren't perhaps that exceptional.

The very significant rise in average user acquisition costs is a potential concern which will have a big impact on profits. Plus say this is to attract higher value professional clients, and low volatility will likely have made its more difficult to attract clients, but nevertheless if this stays elevated then it will hit profits.

Finally - and I am surprised this has never been mentioned here before - there is a competitor on the scene that is taking market share - Trading 212. Based on Google trends and download data I see this as a serious thereat - everyone is focused on IG but seem to be missing this more nimble rival.

[davebdavid] 26/10/2018 14:25

Out of interest. Does anyone have an intelligent view on why shorts are still really high?

[gettingrichslow] 26/10/2018 14:17

Chucko, thanks that's useful information but of course we don't really know what will happen next volatility-wise as your 'if' and 'might' words in the penultimate para highlight..

[rackerrs1] 26/10/2018 13:51

How much u down now you total clown hahahaha

[chucko1] 26/10/2018 13:36

Let’s consider a historic perspective on volatility.

I am looking at the past 38 years of the VIX. (I was not aware it existed for so long, and perhaps I am correct and some of the earlier years are imputed from S&P price action).

By inspection,

the median level is around 17%
the mean is around 19%

With such a large sample size, the difference between the median and the mean is significant - you get tremendous spikes in VIX (up to 75% in 2008 and 40% on six other occasions). But I think the median is the better value to focus on as I reckon a PLUS client is no more likely to trade at 60% vol as compared with 20% - but MUCH more likely than when the VIX is 11% as it has been for long periods.

But the main point is that the graph looks like a series of catenaries (chain-linked fence). Periods of low values gradually increasing to high values. There have been three low periods, each lasting around six years. So that’s 18 years out of my 38 year sample size with low vol. There are two periods (1997-03 and 2007-13) where the median looks like around 24%. The other 8 years simply join these periods together.

Given the above, if you believe that there will be some disruption to the cosy world of QE where you have been able to buy almost anything and it will be financed with almost free debt (I.e. very low discounting rate), we might indeed move into a period of persistently high VIX, something yet to be experienced in the lifetime of PLUS (where there have been just 5 spikes reaching 25% only, a median of around 14% and a slightly higher mean).

Sorry for all the technical mumbo-jumbo, but I hope it’s readable.

[elcapital2018] 26/10/2018 12:35

Its at a level where he would struggle to tie his shoelaces,,,,,,so yes it is too high for him

[jarega85] 26/10/2018 12:33

I think it would depend on whether 25 was high

[nyc25] 26/10/2018 12:23

Yes, tiny tiny brain, but note no activity since the results came out on 23 October. There is a clue in there. If the shorts had liked what they read on results day, they would have upped. How stupid can you be?

[rifleshot3] 26/10/2018 11:48

Gents thx for the nice comments

To try and answer your questions…

-Crypto-Ian White at Autonomous has a bear thesis and in fairness to him (back in August) he took advantage of the tsunami of anecdotal news flow that he likely knew was going to be ranged against the sector (and Plus in particular). But if he was a really good analyst he would have about turned in his incremental note of October 16th or at the very least stayed quiet. Instead, in my view, he now appears to be “fitting”;, (industry jargon for fitting the facts to a pre-ordained theory). He got to $83.3m of Revenue in Q3 (way off it proved) by squeezing all the bearish possibilities until they blew up in his face. His sentiment in relation to Crypto, that Plus really nailed this opportunity as it shot to life in late 2017, and that they continue to get a residual benefit that fluffs there numbers, is correct. But I think that fluffing is fractions (hence “not materially true”) and becomes less and less relevant every day. And this volatility just lays waste to any attempt to negatively pick away at Plus’s numbers.

-Hedge Funds Trimming-Remember that hedge funds are smart, but the real brains goes into the risk analysis, not necessarily the theory around the short position. The latter can be crude mud-slinging, provided the risk reward is sufficiently asymmetrical. A fund with a short strategy as part of their overall offering to LP’s is nearly obliged to have a stock as volatile as Plus as part of their portfolio, just in case all the scaremongering proves true. But provided their risk position is correct, they can use Odey’s obligation to trim as wiggle room if and when their position turns against them. The larger point is that everyone (including me) can worry that the shorts “know something”. More likely is that they are short as part of a blended wider strategy based purely on numbers and a lot of small bets that can pay off big time, but are unlikely to come off when viewed individually. That maybe why the short thesis looks pretty basic: it is.

-Completely right on structural volatility. It may not prove structural and may not stay around, (though Chucko’s Vix Futures point is pretty interesting). But remember this volatility is exceptional and has been for most of October, not normalised. And we do exceptionally well with this level of volatility and (August would strongly suggest) “just fine” with normalised volatility, ESMA or no ESMA.

[elcapital2018] 26/10/2018 11:24

it is strange that they seem bullet proof

shame idiots cant see it, or just dont want to maybe

[jplus] 26/10/2018 11:12

Hanbury's funds have a 10% limit to one holding, so as the price rises he has to trim as he breaks the 10% (assuming other holdings aren't growing at a similar rate or he doesn't cross sell into other Odey funds). As the PLUS rose last time he had to trim all the way up, equally as it fell in last quarter he could increase.

[eentweedrie] 26/10/2018 10:57

lol where is elcapital? seems his tea leaves lied to himup over 10% now since i added recently