Plus500 Share Discussion Threads

[warik] 24/10/2019 16:48

6.91% shorts open on 22 Oct.

0.12% closed by Rubric.

Another 240k shows as buy at 808 mid day I think could be a sell.

I did a dummy quote for 100k shares was 868 so must be a sell let's see if shorters list get updated.

[warik] 23/10/2019 19:01

Australia regs not gone through yet so will have to wait maybe next year.

I have no idea what shorters know and why would they keep them open but looking at 5 years chart there are lot of times Plus has rallied and then dropped like a stone even this happened before February.

Comparing to last year results are very poor also last year was phenomenal cannot be repeated I think so 176m in PL just ridiculous.

Also I assume folks will get smarter with time and make money not lose all the time plus they dont hedge like IG but it's been a great run.

I dont trust Liberum, Berenberg states 800 fair value based on 107m income in next 2 quarters.

Strangely Peel Hunt put 600 reduce when this was 711 & CG states 546 sell haven't change since February.

As long as volatility is there we will be fine.

[djokovic1] 23/10/2019 15:35

I high level agree with your points PL,I estimate a normalized quarterly run rate of $90m after impact of Australia regs assuming 0 market PnL of course. Also this assumes there is no growth in active customers i.e churn each quarter = growth in new customers each quarter.

Interestingly even with the Australia regs and above revenue runrate assumptions, I still see them making $175m of normalized net income on an annualized basis. Which puts them at a 6x PE or a 5x PE ex cash.

So I don't see what the shorts are banking on here.

[warik] 23/10/2019 15:34

Last Oct was 100m.

Interesting part now Plus500 may have to disclose spread revenue and P&L bcoz of the fiasco.

September was quiet month not much volatility as everything went up apart from Oil which I think people would have made money as that was low.

If we get good growth momentum can continue.

I hope we dont get 10-20m of p&l loss as that would send share price down.

Let's see what happens next Tuesday isn't it?

[planelondon] 23/10/2019 13:25

For sure Q3 will be an excellent result. However, the bumper revenue will likely come about from positive customer P&L driven by a return of volatility and the fall in crypto assets rather than a sustainable and permanent rise in long term spread revenue.

It’s easy to get distracted by individual quarters but future spread revenue is likely to remain at its medium term average of c. $95m (based on four quarters post ESMA) as customer P&L is neutral over the longer term.

Growth in long term spread revenues are driven predominantly by internal incremental improvements and growth in active customers rather than volatility or one off events which are only temporary.

Whilst a bumper Q3 is welcome and is likely to include elevated spread revenue as well as significant positive customer P&L, it doesn’t really change the outlook for medium term quarterly spread revenues of c. $95m.

In addition, the likely regulatory changes in Australia, could initially knock as much as 70% off local annual revenues (c. $8-10m a quarter in spread revenue). It’s not too difficult to see the possibility of average quarterly spread revenues of c. $85m in the first half of 2020.

I would suggest the shorts are focused on the longer term average of spread revenues (which always play true to form as it is neutral) rather than a single quarters result which is non-linear.

[warik] 23/10/2019 12:07

& the shorters to burn as i am quite surprised they haven't closed their positions if this is running away.

[warik] 23/10/2019 12:06

Fantastic then does anyone think this will run to £10 or £12 just like its been running for past 2 months.

[markbelluk] 23/10/2019 09:59

Great posts all! Helpful thank you

[djokovic1] 23/10/2019 09:44

I think Q3 is going to be good. If you look at Q2 they did 93mio in spreads + funding charges and 1mio in market PnL. In Q2 S&P was up 4% and average VIX level was 15.

Q3 is likely better than Q2 with S&P flat and average VIX level at 16. Also higher currency and commodity volatility in Q3 relative to Q2.

Note: Flat and down equity markets are generally better for Plus as traders are long biased in equities. Part of the reason why Q1 2019 was so weak and market PnL was -28m.

The other positive is higher active user numbers and lower churn rate trend that we saw in Q2.

I am not that worried about oil price move as it is just one market (small proportion of their revenues) and also if you look at client positioning (IG and Plus) it is currently 70% long so Plus could also have benefiting from the down move instead of it being a negative. (Caveat: Investor positioning is as of right now,I don't know what it was at the start of the quarter)

My rough estimate is revenues of $110-$120m for this quarter which would be above current market expectations of $106m per quarter. Also still trades at 6x normalized earnings and 5x cash adjusted earnings.

[metis20] 23/10/2019 09:43

A sell order for about 35k shares has been showing on level 2 this morning - it has disappeared now. It was moved between about 825p and down to 802p and then back up again. Muddy Water/ BUR shenanigans come to mind.

Anyhow it has disappeared now!

[metis20] 23/10/2019 09:38

and there was just one share repurchase on December 18 2017, in response to the drop in share price caused by the ESMA update RNS on that day - the share price had bounced back up above 800p by the next day..

"Plus500, a leading online service provider for retail customers to trade CFDs internationally, announces that, in accordance with the terms of its Share Buyback Programme announced on 7 August 2017, the Company acquired 38,000 ordinary shares of ILS 0.01 each in the capital of the Company ("Shares") on 18 December 2017 at a price of 789.02 pence per Share."

[sailing john] 23/10/2019 09:29

Mark - Copied below my post from another BB dated Oct 31st 2017
They appeared to stop and restart as price moved above/below the 810-820 price - never got an accurate number as too volatile and they didn't publish individual trades just the daily average. (Likely to be other factors such as market volume and I did wonder in 2017 if MACD or other indicators might be used to apply the brakes if necessary as it is pretty much an automated system and certainly out of the hands of PLUS once they have set parameters)

From Oct 2017
"Looking at the only bubacks post Aug 1H17 results 7th 741p, 8th 798p 9th/10th none (price above 820) 11th 807p and no further buybacks
Suggests that perhaps a price limit set around 810-820p"

[markbelluk] 23/10/2019 09:15

Appreciate the insight John. Do you know in 2017 when the buybacks hit 810 did they stop completely or restart/stop as the price dipped under/return above 810?
TIA

[sailing john] 23/10/2019 08:46

Buy backs - Is there a price cap set at 810p - Lower vol yesterday and highest price 810p
Interestingly (or not) the buyback cap appeared to be set at about 810 in 2017 but very few actual buybacks as price above 810 for most of the buyback period!

And looking back through some old posts I found this comparative chart that starts from the FCA tightening announcement date 6th Dec 2016
Shows the volatility of PLUS over past 3 years vs IGG and CMCX which haven't been as volatile but haven't seen the same rise. (It's all about avoiding the downside hence my cautious approach)

[sailing john] 23/10/2019 08:32

Re Q3 TS discussion - I'm currently out as nervous about Q3 oil price shock. PLUS are of course uniquely exposed to big shocks as they offer negative balance protection to Pro and Retail Traders - just part of the risk they/shareholders take. Oil is of course one of the most traded instruments on PLUS and it is possible to open positions as high as $5m currently (might have been $4m when oil moved) on an individual basis if you have the margin to do it.

Having said that if they escaped significant losses from negative balance protection on the oil price move it could be a bumper quarter given volatility in commodity and currency markets.

My trading strategy is to avoid any downside risk and having exited 4 weeks back I've missed about 50p (and rising!) of potential gains but I have to accept that. This strategy has served me well in the past.

"sailing john - 23 Sep 2019 - 15:01:33 - 21099 of 21240 PLUS500
Decided to exit until Q3 TS - nervous about exposure to oil price shock ie customer P&L. If none then Q3 should be positive given IGs recent TS but I don't do risk and easy to jump in and out - taken nearly 25% in 6 weeks since interims. Hopefully back in post Q3"
GL - SJ

[markbelluk] 23/10/2019 08:09

I agree with Metis... my GUESS is also inline or above. Especially when you factor in both CMC and IG's recent updates, both positive+, citing recovery from previous bad quarter/s

[metis20] 23/10/2019 07:42

warik - A trading update of sorts, signalling likely content of Q1 trading update in March 2019, was given in the Prelims 12 Feb 2019

"Following our latest assessment of the impact of the ESMA regulatory measures, FY19 revenue is expected to be lower than current market expectations."

That was a clear indication that Q1 trading update would be weak.

Q2 2019 was of course much stronger than Q1.

The fact that PLUS500 has not issued a trading update between H1 and Q3 updates suggests to me that Q3 will be in line with expectations.

Will come back to shorters' positions later..

[valentine73] 23/10/2019 00:36

Upward trend still looking good. Now settling over 800, a positive update next tuesday will see some nice movement.This has climbed steadily from mid 400 to here.Target £10

[metis20] 22/10/2019 22:38

warik - No need to have an RNS giving the date of Q3 trading update as the date is on the PLUS500 website



(Many thanks SJ.)

The previous two Q3 trading updates had RNSs about a month before to give the date of the trading update. That did not need to happen this year because the date of the Q3 trading update is available on the PLUS500 website. Presumably that was not the case in 2017 and 2018. So nowt imo to worry about so far as lack of Sept 2019 RNS giving the date of the Q3 trading update is concerned.

[sailing john] 22/10/2019 19:07

3Q TS is 29 October
SJ

[warik] 22/10/2019 18:52

Metis

Plus500 usually notify result date like you said going by last 2 Septembers they haven't done that this time does that mean anything to you?

They did the same in March this year didnt notify and was a disaster.

I'm just concerned we dont get screwed again as shorts are closing however still 7% holding maybe they know something we dont is that plausible?

Stock has been up for past 2 months without significant news apart from buybacks.

Odey & Aberdeen reduced you're very knowledgeable sorry so many questions?

[markbelluk] 22/10/2019 08:22

Thanks Metis ...I was just looking through the RNS to see if the buybacks had hit over 800....this is great news

Thanks for all your input mate, appreciated

[metis20] 22/10/2019 07:14

Yesterday's buyback - Highest price paid per share 803.4p

Good to see that 800p is not the current buyback ceiling...

Approx. 40% of the US$50mn max. spend for current buyback has so far been used.

sp was approx 700p when the buyback started.