Plus500 Share Discussion Threads

[fxprotrader] 04/5/2020 09:23

Wont matter. This will always be under rted based on numbers alone.

It is not trusted

[galileo8] 04/5/2020 09:20

Announcement of special dividend, volatility in the markets remaining at these levels, a drop in oil price, analyst upgrades, director buys, share buy back being increased etc etc, all of which are more than 50 percent possibilities

[fxprotrader] 04/5/2020 09:01

its a share buy back plan, price isnt relevant

[jw330] 04/5/2020 07:38

the real question now is what will finally move this share price? I don't think the price reflects value but current technicals suggest otherwise. There is very little volume and unless we can get some catalyst prices could be floating down towards 1100s or lower.

[t 34] 04/5/2020 07:30

The share bayback - company was happy to pay almost £13 on Thursday .

[jw330] 04/5/2020 06:52

well...woke up this morning to see oil down 7% again. I think we are definitely going to at least match first quarter revenues for these three months due to oil volatility. googletrends indicating search interest remains roughly twice as high as Jan, Feb months

[stoxx67] 03/5/2020 18:36

for pity's sake chaps, you are both taking up too much space on a thread that is supposed to be about PLUS500 stock, not your quarrel.

[fxprotrader] 03/5/2020 09:17

Are you german?

[aleman] 02/5/2020 11:50

racksisthedon
2 May '20 - 09:31 - 22606 of 22607 (Filtered)


FXprotrader
2 May '20 - 11:25 - 22607 of 22607 (Filtered)

[fxprotrader] 02/5/2020 11:25

You only have to look at the posting history of the loser above to see he is a troll

Lost everything on TERN and now lives in a tent as he has no money to trade. Hence why he is so jealous!!

[racksisthedon] 02/5/2020 09:31

answer the question pig filthjeannettetigger30 Apr '20 - 20:00 - 29480 of 294910 3 0FXprotrader are you in any way related to the President of the United States of America

[djokovic1] 02/5/2020 08:35

Yes Mark, I was looking at it from the highs of £13.2.

It does feel like more given the trading update and the fact that fundamentals for the business continue to be as strong as they were in March/April.

[fxprotrader] 02/5/2020 07:19

You really are a bit thick aren't you harmer you mug punter! You clearly don't understand and I'm not going to educate you

[barryharmer] 02/5/2020 00:05

There is no comparison with IG. IG has much higher overheads, generates less profit and pays tiny dividends.

[markbelluk] 01/5/2020 21:34

DJ we've only lost 3.6% this week not 10%! (1254 to 1209)..although admittedly it seems like more

[jw330] 01/5/2020 19:18

Meanwhile plenty of volatility in USA. Elonmusk going nuts on Twitter and also gunmen storming Michigan state house it's going be exciting for the rest of this year for sure!

[fxprotrader] 01/5/2020 18:32

ffs there is no comparison with IG!

[simplethesis] 01/5/2020 18:13

The distribution of sell side recommendations is roughly 85% buy, 10% hold, 5% sell, so the recommendation are less followed. Consensus estimates do however matter, which is why the Berenberg estimates are important. This is amplified by that bank having previously been joint broker to Plus500, which adds weight to their work.

To be clear, the Berenberg estimates are deeply flawed even before getting the number of shares wrong. He has, as you would expect, a quarterly model which is driven by active customer numbers and ARPU assumptions. He has then put in high churn in Q3 and Q4 such that his active customer number is back low enough by Q1 2021 to give him $403m revenues that year. This fits the narrative he advanced after the first RNS at the end of February that this volatility would be just like Q4 2018, with customer P&L reversing out in Q1 2019, such that the two quarters together summed to two average quarters.

He is thus able to "look through" 2020, and value the company from 2021 estimates, plus the returns of 2020. Only he hasn't counted all the 2020 shareholder distribution, because he hasn't applied enough buyback, which is not great.

The share count mistake is just a mistake. We all make mistakes. It's what we do afterwards that matters.

The bigger error, and one which is a shame from a former broker to the company, is to say that this company will be back to the revenue run rate of late 2019 after a 2020 in which the company spent $53m on marketing in Q1, then another $50m in Q2 (Berenberg has $78m total costs in Q2, which will mean marketing at about $50m). This is categorically not how the business works. If one started thinking that marketing would be $22-24m a quarter, than the "extra" spending needs to be considered. Look at slide 11 of the FY19 presentation:

hxxps://cdn.plus500.com/media/Investors/Reports/Plus500_Investor_Presentation_2019.pdf

Marketing spend has lasting value. What revenues did the marketing spend of past years generate in year two, as a percentage of the spend?

2014 - 130%
2015 - 82%
2016 - 95%
2017 - 238%

If the 'extra' marketing spend in 2020 is $30m in Q1, and another $30m in Q2, then, even if Q3 and Q4 are at a more modest level, you would expect that extra $60m of spend to generate extra 2021 revenues of close to that sum, depending on volatility levels in that year. There is no consideration of this in the Berenberg work, that I can see.

Time and time again people are distracted by customer churn concepts for a business in which 9% of customers are 91% of revenues, when you should be looking at the marketing spend, which is this company's capex. Analysts with hold/ sell recommendations advance the idea that customers come and go and the business returns to previous run rates, but this is factually incorrect. Not all customers are equal, and the ones still trading after a year are the ones with the deeper pockets who love to trade on this platform, and who will be generating revenues even in year three. When you drive your numbers uniquely bottom-up from customer numbers, you are ignoring this distillation process, without realising you are doing so. None of this is my opinion - it's the historical fact, time and again.

Note also that this customer value evolution over time is remarkably consistent, and fits with IG's experience. See slide 28 of IG's FY19 results presentation:

hxxps://www.iggroup.com/sites/ig-group/files/2019-07/igg-fy19-results-presentation.pdf

On 28 Feb the Liberum 2021 revenue number was $362m. On 16 March it rose to $401m. On 7 April it went to 413m. On 28 April it went to 420m. None of this happened randomly. Successful 2020 customer acquisition drives 2021 revenues.

[eeza] 01/5/2020 17:46

They aren't bothered. They use OPM - unlike us.

[djokovic1] 01/5/2020 17:20

Can't believe the buy side actually follow these guys recommendations given that have such glaring and obvious flaws