Broker platform Plus500 is keeping on with its share buyback program, and it spent a little bit under £500,000 worth of its own shares in recent days. The London Stock Exchange published the details of the operation, which was previously planned.
Through Credit Suisse Securities, Plus500 acquired a total of 67,745 ordinary shares on the London Stock Exchange. The retail broker paid an average of 738.01 pence per each share, with a high of 757.20 and a low of 709.60.
Nearly £500,000 Worth of Shares
The total amount of money spent on its buyback program, therefore, was roughly £499,964, the equivalent of $610,206. After the events, Plus500 now has 1,789,283 total ordinary shares, which are being kept in the company’s treasury.
Rumblings about a buyback program were being heard since last week, and then, it became official. The details of the operation were published in the retail broker’s financial report for the first semester, and the platform stated that it would commit a total of $50 million of its cash reserves to acquire its own stock.
Unfortunately for the broker, the performance in that mentioned first semester wasn’t up to its standards, and the announcement of the buyback program is directly related to that situation. In total, the earnings tumbled by 68 percent in comparison with the first half of last year, and 42 percent when compared with the second semester of 2018.
Analyzing the Situation
However, if the intention is to provide a complete analysis, other situations besides the revenue numbers need to be added to the equation, and Plus500 had to endure some unique conditions that contributed to the reported collapse.
It needs to be said that the excellent performance reported in the first half of 2018 was largely fueled by enhanced crypto involvement and trading. A scenario that hasn’t been the same ever since Bitcoin began its downward turn from nearly $20,000 to the $6,000 – $6,500 range at the end of the year.
Also, the regulatory landscape has to be considered. In August 2018, there were some changes in that regard introduced by the European Securities and Markets Authority, and they brought negative consequences on the everyday operations of the broker.
The mentioned impact came in the form of a low volatility timeframe that started near the end of 2018 and carried on towards 2019, into the first quarter.