Superstar share Plus500 has plummeted back to Earth. This super stock rose from a price of £3.14 5 years ago (14 Feb 2014) to a high of £20.76 and following a profits warning has dropped to £10.88 today 13 Feb 2019.
Tom Winnifrith has commented on this company and the dangers of investing in companies where 80% of their customers lose money. I agree with him, this cannot be a recipe for long term success.
But are the directors stupid or have they misled the market?
The latest news and the profit warning are reported in the Daily Mail, 12 Feb 2019, https://www.thisismoney.co.uk/money/markets/article-6695269/Plus500-good-true-Shares-lose-value-EU-crackdown.html. One has to ask should the directors have seen this coming and issued a profits warning earlier?
The second piece of this jigsaw is the pay revolt: Online trading firm Plus 500 angers shareholders by ramping up the potential pay of its boss and finance chief by more than £4.1m, reported the Daily Mail on 21 January 2019 https://www.thisismoney.co.uk/money/markets/article-6616697/MARKET-REPORT-Plus500-investors-rebel-row-fat-cat-pay.html. I ask why were the remuneration committee making such a proposal just before a profits warning? Were they aware of the forthcoming profits warning, or were they aware of a non-trivial probability of a profits warning being needed?
The third jigsaw piece is that the company has been buying back its shares. This is an issue that always concerns ShareSoc. as recently as 23 January 2019 Plus500 Ltd. purchased 10,000 shares through Liberum Capital Limited at volume weighted average price paid per share of 1,488.23p. Previous purchases were
Insider | Transaction | Type | Value | Date | Shares |
PLUS500 LIMITED | Buy Back at price 19.28 per share. | Direct | 192,800 | 22-Jan-19 | 10,000 |
PLUS500 LIMITED | Buy Back at price 19.31 per share. | Direct | 96,535 | 17-Jan-19 | 5,000 |
PLUS500 LIMITED | Buy Back at price 18.98 per share. | Direct | 379,560 | 15-Jan-19 | 20,000 |
PLUS500 LIMITED | Buy Back at price 18.81 per share. | Direct | 94,030 | 14-Jan-19 | 5,000 |
PLUS500 LIMITED | Buy Back at price 18.69 per share. | Direct | 93,435 | 10-Jan-19 | 5,000 |
PLUS500 LIMITED | Buy Back at price 18.86 per share. | Direct | 188,619 | 09-Jan-19 | 10,000 |
PLUS500 LIMITED | Buy Back at price 18.81 per share. | Direct | 376,160 | 08-Jan-19 | 20,000 |
PLUS500 LIMITED | Buy Back at price 19.00 per share. | Direct | 380,020 | 07-Jan-19 | 20,000 |
PLUS500 LIMITED | Buy Back at price 16.22 per share. | Direct | 243,344 | 17-Dec-18 | 15,000 |
PLUS500 LIMITED | Buy Back at price 17.89 per share. | Direct | 357,740 | 05-Dec-18 | 20,000 |
PLUS500 LIMITED | Buy Back at price 18.64 per share. | Direct | 323,546 | 04-Dec-18 | 17,353 |
PLUS500 LIMITED | Buy Back at price 18.27 per share. | Direct | 182,740 | 28-Nov-18 | 10,000 |
PLUS500 LIMITED | Buy Back at price 18.10 per share. | Direct | 181,010 | 27-Nov-18 | 10,000 |
PLUS500 LIMITED | Buy Back at price 16.56 per share. | Direct | 331,240 | 19-Nov-18 | 20,000 |
PLUS500 LIMITED | Buy Back at price 16.35 per share. | Direct | 498,061 | 16-Nov-18 | 30,455 |
PLUS500 LIMITED | Buy Back at price 16.91 per share. | Direct | 137,925 | 05-Nov-18 | 8,155 |
Also interesting is the sale by Alan Gonen of 2,250,000 shares on 13 Dec 2018 at £13.90.
This was preceded by sales by Gal Haber and Michael Fairburn at somewhat better prices.
Director/Date/Type | Amount | Price (Pence) | Value ($) |
Mr. Gal Haber | 1,200,000 | 1,550 | 18,600,000 |
06/09/2018 | Sale | |||
Mr Michael Charles Fairbairn | 7,500 | 1,803 | 135,257 |
15/08/2018 | Sale | |||
Mr Michael Charles Fairbairn | 10,000 | 1,820 | 182,000 |
15/08/2018 | Sale | |||
Mr Michael Charles Fairbairn | 29,500 | 1,818 | 536,310 |
15/08/2018 | Sale | |||
Mr Michael Charles Fairbairn | 3,000 | 1,809 | 54,280 |
15/08/2018 | Sale |
Buybacks of shares at times close to when directors are selling shares are a concern. With the benefit of hindsight, it would have been better to delay the buy back programme and do it at the current much lower price.
This is clearly not a share for the risk averse.
Cliff Weight, Director, ShareSoc
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