RE: H1 update17 Aug 2021 16:07
Agreed. Though this cash pile has been building pretty much since IPO. On the one hand it's frustrating to have relatively muted dividends, share buybacks, and small M&A activity. As a shareholder I want them to be a little bolder - if they're not looking to make a big acquisition that's accretive to returns going forwards then they should return cash to shareholders in the most efficient way possible (probably a really big share buy back program -> offer to buy 30% of the outstanding shares etc). The alternative explanation/consideration is that Plus500 takes on a lot of risk by being the counterparty. As active customers and potential position exposures increase Plus500 has to have more and more fire power on hand to hedge in case of overexposure. Unfortunately this results in dead capital that can't be deployed, though lowers the inherent risk (risk of shareholders losing all their money) in the investment. It would help if management could provide clarity as to why they think they need so much cash? Start with: How much is for hedging potential exposures?