Trading platform Plus500's shares crash due to 'surprisingly subdued' markets

Atletico Madrid team

Atletico Madrid team

Total sales fell to $53.9 million during the three months that ended March 31, from $297.3 million a year ago, the Israel-based firm with subsidiaries in the UK, Cyprus, Australia, Singapore, and Bulgaria, said in a trading statement early on Friday.

Berenberg downgraded its stance on shares of online trading platform Plus500 to "hold" from "buy" on Friday and slashed the price target to 770p from 1,800p after it posted a big drop in first-quarter revenues amid "extremely subdued" financial markets. The 97,921 active customers in the period under review were down from 218,187 in the prior-year period.

Compared with the fourth quarter, revenue was down by 65 per cent.

Plus500's share price fell by over 40% in response.

Elimelech said the company still had much to be encouraged about.

'Given the level of global political and economic news, financial markets were surprisingly subdued in the period, which reduced the number of trading opportunities for customers, ' chief executive Asaf Elimelech said.

On the bright side, however, the number of new customers rose 10% from the previous quarter to 21,306.

Peel Hunt said Plus500 is a digital marketing business that relies on a relatively low fixed cost base with variable costs targeting client acquisitions.

In February, Plus500 saw shares drop by almost a third after it warned over full-year profits, blaming a regulatory clampdown across Europe. Revenue is also expected to fall.

'Given recent regulatory changes, it is imperative to attract, engage and retain valuable customers and the company is working on a number of initiatives to extend its reach and further improve the customer experience and the service offered'.

Notícias recomendadas

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.