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Not great not having any info on active users or split between customer income and trading performance…it was there last year. It’s a very laconic update.
I don't think the fact that shares are not cancelled is a problem. Public companies almost always hold shares bought back in treasury rather than cancel them. You need a shareholder vote to cancel shares as well (to issue and buyback or too). Also, you require a shareholder vote to issue stock as compensation to management. What is the point then of cancelling shares? If enough shareholders team up, you can reject any share allotment plans to management (without the need to cancel shares). It seems to me cancelling shares is then purely an accounting exercise. Arguably, not cancelling is more transparent as book value of treasury shares shows up in the balance sheet. By the way, at the last AGM in May 2023, the board was authorised to issue c. 5mn shares for cash and c. 5mn shares for acquisitions (that's excluding whatever is held in treasury). This gives the board flexibility to act. Similar resolutions were passed in previous years.
More likely due to the fact of buybacks ongoing - would not see this as meaningful
Great news on the investor meet company on the lawsuit - they expect this to affect only the Israeli operation which constitutes less than 1% of revenue. See very minimal impact on results, and make provisions on this anyway.
Great price slump! Better price for the buybacks kicking in tomorrow!
Anybody notice the new investor relations page? Maybe investor charm offensive is on the way :)
https://investors.plus500.com/Business#our-vision
Lots of volatility this quarter in stocks, crypto and commodities - should be a very good one.
It seems to me more and more that its not the lawsuit - look at shares of IG or CMCX - same story there - it looks like a wider sell-off of CFD brokers on the basis of slowing trading activity and thus lower earnings in the next few years (yet this has been priced in for plus for a long time as they are trading at 3x-4x EV/EBITDA even with the conservative analyst estimates).
Seems the lawsuit is actually old news: https://www.calcalistech.com/ctech/articles/0,7340,L-3734931,00.html
Three years ago estimated by $28m, but the market cap dropped $200m
I think the drop is a combination of
1) lawsuit
2) Stockbroker results disappoint all around -see Robinhood results (mitigated as Plus has already published Q3 results which were very good)
3) End of share-buyback - similar movement happened when they concluded the previous programme - this will surely have to be reinstated soon given their shareholder returns policy
From the above only 1) is meaningful in my view, but impact should be limited
+ Robinhoods terrible results? yet Plus has already published Q3 update...
Just doing some quick and simple math here - this company had $594m cash on 31/12/2020, in H1 they probably made 50% of the reported Customer Trading Income at $379m, which should equate to lets say $190m but they will pay a dividend of $85m tomorrow - so $594m + $190m - $85m = $699m of cash at the moment, while market cap at the moment is $2bn. Substracting the cash $2bn - $699m = $1.3bn, while they are very conservatively expected to make $200-250m a year of profit (but made more than $500m in 2018 and 2020, and could be on track to make $350m this year). So this gives a cash-adjusted PE ratio of 5.2x-6.5x conservatively, and optimistically 3.7x, while a 2020 repeat with annual earnings of $500m would mean a 2.6x valuation. This is a tremendously cheap valuation, together with growth opportunities in Plus500 Invest and the US expansion does look very attractive from my point of view, while I the share price keeps falling to my bewilderement.