Institutional Investors Flock to Plus500 after Value Drops by a Third

The 30 percent correction in the value of retail brokerage Plus500 is attracting attention from more professionals. The increasing amount of institutional investors who have purchased shares in the company include some old and new names.

The news comes a little less than a week after the founders of the company sold about eight percent of the company's float. The event triggered another leg lower with the shares of the retail brokerage bottoming out on Wednesday at around 1366 pence per share, a 34 percent decline since the peak marked about a month ago.

Crispin Odey’s Fund is Back In

The investment venture of Crispin Odey, Odey Asset Management is back in, building up its stake. The company’s holdings have surpassed 10 percent once again after falling near the 5 percent mark earlier this year.

Crispin Odey’s investment fund was a vocal opponent of the deal between Playtech and Plus500 several years ago. At the time the retail brokerage was facing some difficulties when dealing with clients.

The second new player in this mix, its Luxembourg-based private equity fund Axxion. The news about the company acquiring a five percent stake in Plus500 was publicly announced via the London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term news service on Wednesday.

The largest institutional investors of Plus500, Bright-Tech and Odey Asset Management, now own close to a fifth of the company.

Plus500 Shares' Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term

After staging a massive rally in the aftermath of a blowout first half of the year, shares of Plus500 have peaked out. The company’s founders and Playtech cashed out after the firm’s record-breaking first half results.

As we can see on the chart above, shares rallied over 135 percent since the start of the year. Plus500’s stock peaked out at 2078 pence per share at the beginning of August. The subsequent correction that took prices lower by over 33 percent was attractive enough for new institutional buyers.

The firm’s management highlighted after the announcement that they do not expect to repeat these results in the near future. After the company onboarded a record number of new traders in the fourth quarter of 2018, the crypto bubble burst led to outsized losses for CFDs traders in this asset class.