Plus500 Share Discussion Threads

[jplus] 01/11/2018 20:58

Furthermore to my other comments. You can't apply an average of the previous 6 months to get a July figure. Q1 was clearly a one off, due to crypto. Management, and everyone understands that. On your logic q2 should have been rev. 210m not 168m in a quarter with far more favourable trading conditions to q3.

[jplus] 01/11/2018 20:47

It's in the liberum note that August was bigger than July. Why doesn't it make sense that August or September could be better than July? July likely poor month, low Vol, hot weather, World Cup. August remained low vol on equities but there was volatility in currencies. 30% minimum of business is outside EAA . 38% of EAA came from EPC so not effected by ESMA. Even if retail was Zero (which clearly it wasn't) your numbers wouldn't stack up. Mathematically it has to be much closer. It just takes certain instruments as August proves to be trading better in these months and so not such a surprise. With Volatility being high for most of October and looking likely to continue with the midterms, brexit etc.. ahead, there really is no reason to believe that plus aren't creating very good revenue so far in Q4. The danger here is to over estimate the effect of ESMA for this business, there are some pretty sharp minds who view ESMA as a net positive long term. Increasing EPC conversion, retail get used to the restrictions, adapting & increasing trading (the effects in Japan of regs lasted 2 quarters) and a real opportunity to pick up active long term traders due to consolidation of the market.

[blue meaning] 01/11/2018 19:55

I didn’t see anything in the last trading update to suggest that August outperformed July. If it did then, it doesn’t make sense. Indeed the difficulty in judging what’s coming next lies in the inability to see the esma effect clearly month by month over the last quarter. I am assuming July was still good and comparable with the previous 6 months. Therefore what’s left of the 100m split across Aug and Sept has to be considerably lower

[rifleshot3] 01/11/2018 19:10

Blue Meaning August out performed July. How do you explain that?

Biz will do well North of $130m revenue in Q4. Possibly as much as 150-160.

[blue meaning] 01/11/2018 18:38

Shorts not closing because shares are still priced too high.
Q3 revenue of 100m must be skewed by July which could account for anything up to around 70m if you use the average monthly figure based on the preceding 6 months. That leaves August and Sept at 15m each which is a massive drop and would equate to future annuals of 180m.
So Plus made in Q3 what it used to make in a month - that’s a 60% drop off.
Even the RNS states that Q3 18 revs were 14% lower than Q3 17 and the shares were £7or £8 back then. So why are they still at £13 now? New licences won’t take up all the slack in my view. I can see this heading below £10 before the next update and if Q4 revs come in at around 45m then heading back to £7 or £8. The founders actions in a few weeks will be a good indicator as well as to where this is headed

[moneypenny2018] 01/11/2018 18:02

I am talking about the physical borrowed stock position on the FCA website* which now seems to stand at 9.72% as of 31/10/2018.

Those are physical short positions and not CFDs. I don't think some of these guys are even allowed CFDs (i.e D. E. Shaw & Co. LP is a US based institution and they are not allowed CFDs in the US... for now at least as Trump is making changes to Frank Dodd act which if fully taken down it might allow CFD providers to enter the US... huge upside for Plus500 but this is not certain)


So those shorts (the 9.72% guys) need to pay the dividend. If you are trading CFDs then dividend will be reflected differently (as you mention)

This has so far been noting but a "too good story". It is one of the most shorted stocks. The shorts decided to bet on ESMA. Well I think they had a good return so far and were hoping that revenue or even sentiment would affect these businesses. It has but not a much as they would have thought.

On your last question about the founders. I can reply by saying that if this was an issue then Invesco Ltd, which as per today's RNS has built a 5.44% stake in Plus500 could have waited to get a better price. I am sure Invesco, Oddey and Blackrock who bough their stake much higher are smarter then me and you.

*Google FCA short position and you will find Plus in the spreadsheet.

[technovator] 01/11/2018 17:22

moneypenny2018 shorters will not have to pay out 137.86¢ per share on the 22nd of November because they would already have had a negative dividend adjustment for this amount on the 23rd August. That's how contracts for difference's work.


You mention that the shorters don't understand the business however i can assure you they do! The too good to be true stories don't normally end well! it's nothing personal.

One question for you, In about 5 weeks the founders can dump their remaining shares, do you think they also don't understand the business as well?

[moneypenny2018] 01/11/2018 13:46

but who knows maybe now that JP has offloaded this might be easier to do. As I said shorts have been hiding behind JP offloading now that this is out of the way what next?

[moneypenny2018] 01/11/2018 13:43

Buybacks will start soon. Don't pay to much attention to current price it is being manipulated. Shorts trying to create downside momentum that is why every time we move down we bounce back up because the close intraday after attempt to create downside momentum … I have seen this so many times the last few days that I am surprised they are getting away with it and no other hedge fund trying to short squeeze them

[metis20] 01/11/2018 13:38

Invesco have appeared at 5.44% - taking advantage of those who have been shorting recently.

[s_a_b] 01/11/2018 13:34

Nice posts, agree uncomfortable territory for shorts barring some major adverse news. Just need some aggressive share buy backs to put more pressure on!

[moneypenny2018] 01/11/2018 13:23

Also please note that we are trading ex-dividend date and shorts need to pay out collectively on the 22nd of November 10% of the total special dividend that has been declared (137.86¢ per share).

In addition to the borrowing costs they need to pay for the dividends. With Plus expecting good annual results and possibly declaring another good dividend soon. You think shorts going to stick around paying those dividends?

The only think I have to say is LOL

[rackerrs1] 01/11/2018 12:19

The moron keeps reminding us he knows something but never reveals it. Pathetic troll. The loser is there to be ridiculed.

[elcapital2018] 01/11/2018 09:59

so funny

resident mug punters trying to justify everything

Usual red flag

oh look



if you novices ignore this you deserve your losses. im not saying it is guaranteed but its likely

[gettingrichslow] 31/10/2018 19:17

Good news for PLUS if the CEO of Natixis (2nd biggest French asset mgr) is right - interview on Bloomberg, he says the recent volatility will be 'the new normal' and that it will now be 'risk on' followed by 'risk off' for the foreseeable future.

[jplus] 31/10/2018 17:06

Your thoughts are interesting. I guess key points to remember are for future growth. Growth outside EAA1. Singapore, IG second largest market and they've had a year of marketing there now, expect strong growth if their record in Europe & Australia is anything to go by. 2. Australia, seen strong growth and no reason to stop. Further regulation a risk. 3. $377m cash balance for acquiring new licences/acquisitions . (I Understand Hong Kong is likely early 2019 and Japan in their sights) These new firms like trade212 do not have close to those reserves. Their turnover isn't even a 6th of that number. So yes be weary but don't underestimate competitive and financial advantage. Plus remain agile too. Inside EAA1. EPC up from 20% to 38% of EAA rev in a low vol quarter 3. How do they convert in a high vol quarter. Clearly much greater with more trading/motivated to become EPC. Likely we see further increase to 45-50%2. Regulatory experience from Japan, saw decreased retail trading for 2 quarters. Strong chance retail customers get used to new regulatory framework and the new frame work is normalised and retail start trading again. That is what has happened elsewhere. 3. Brand Plus500 is well recognised established, this has taken a lot of excellent marketing and time. No.1 in UK, Germany, Spain etc.. which will help conversions. These new competitors companies simply don't have that brand recognition, financial clout and they are no more nimble than Plus. Unlike plus' largest current competitors CMC & IGG whose overheads are huge compared to plus. 4. Regulation will also have the effect of consolidating the industry. Yes, crypto has muddied the water in terms of where revenue comes from. Plus have been expert at maximising it. Which not only lines their pockets giving them financial clout to grow business but shows their agility. I think a company able to maximise opportunities is an advantage rather than disadvantage. Plus has grown its business over long term and I think would have continued to at similar rates without crypto. So yes Volatility should give a bumper Q4 and maybe more. They above reasons are why I think this business has plenty of opportunities for growth.

[riverman77] 31/10/2018 16:27

It is a great bit of analysis and the trading update was generally reassuring. However, after reading it a number of times I still think its impossible to say how Plus will perform going forward, ie, under normal market conditions and once the impact of ESMA has been absorbed. We also need to remember that the crypto boost has probably gone for good, while there seem to be nimble new competitors snapping up business. For the moment I'll keep my small position but won't be adding just yet.

On other hand, even if we assume that the recent trading update represents the new normal (very much a worse case scenario), then Plus is still a highly profitable business trading on an attractive valuation. Importantly for me it's one of the few businesses I can think of that actually benefits from higher volatitly so is a very useful diversifier.

[intelligentinvestor1] 31/10/2018 16:07

Wondering why there is no RNS update if buyback has already started.