What's happening to Plus 500?

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1st Dec '16 by pck76

9 comments 7502 reads

Down 17% today but can't find any news on google...

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Pck76

Premium Member

9 comments

Damian Cannon

1st Dec '16

This will be why - from the RNS just out:

Plus500, a leading online service provider for retail customers to trade CFDs internationally, notes the movement in its share price and market speculation following the publication on 30 November 2016 by the Cyprus Securities and Exchange Commission ("CySEC") of a series of questions and answers in a circular relevant to the CFD industry in which the Company operates.

The Company does not believe that the topics covered in the circular will have a material operational or financial impact on the Company.

lightningtiger

1st Dec '16

With JP Morgan recently buying 10.3M shares, I think there has been quite a few people shorting the stock. It is still way undervalued, V Vest is giving a value of 1134p & I am sure people picked up a few more shares @ around a fiver. seeing it pays out good dividends and still making good profits.

mpat89

2nd Dec '16

I don't really understand the bear case so I bought

andrewdb

2nd Dec '16

https://ftalphaville.ft.com/2016/12/01/2180644/bra...

Looks like they will have more rules on
- recruiting more spreadbetters (no more bonuses)
- limits on leverage

If revenue drops 10%, profit looks like dropping ~25%
Which to me should push the sp down ~25%

however "The Company does not believe that the topics covered in the circular will have a material operational or financial impact on the Company."

... and they may be right, from the company's pov, recruitment bonuses are a red queens race - they only offer them because the competitors do too. Do you

a) decide to open a sb account with 300 because you get an extra 100 (after 3m and a lot of trading) or

b) decide to sb and then choose the best offer

I think b

A similar point applies to the max leverage.

So ... I am waiting for a floor on the sp and then will think about it some more.

ExpectingValue

2nd Dec '16

This is quite a dangerous way of going about things..

EDIT: to flesh out a bit more specifically re: Plus500 - I think shareholders should be very worried not only by the specifics, but also by the general indication that CySec are taking the whole sector more seriously. Many CFD guys are clearly screwing their customers, so the direction of travel being toward further regulation does not bode well for them in the long term.

PJ0077

6th Dec '16

Looks like the FCA are also keen on tighter regulation. From today's FT: "We have serious concerns that an increasing number of retail clients are trading in CFD products without an adequate understanding of the risks involved, and as a result can incur rapid, large and unexpected losses. We are introducing stricter rules for CFD products to ensure the sector addresses the shortcomings identified, and that firms make sure that retail clients are aware of the high risks involved in trading these complex products".

Andrew niven

6th Dec '16

Change and tightening of rules

mpat89

6th Dec '16

Yet only 15% of plus revenues come from fca regulated markets

Rusty2

6th Dec '16

Anyone average down or buy any Plus500 (LON:PLUS) this morning when there were in low 300s?

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About the Author

Pck76

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