Editor’s note: This article was first published in May 2015 as breaking news on the day of the suspension; the suspension, share price and outlook it describes reflect that day only. The shares later resumed trading and the company stayed listed.
Plus500 shares have just been suspended from trading on the London Stock Exchange as more details came to light in the markets. Yesterday we explained the situation this company is going through and the four days of losses it had suffered on the stock market.
This Friday, things did not look any better for the company, which opened with another steep fall. By the time it was suspended it had already shed another 24%, a cumulative fall of 70% in just one week that has taken the share price down to 292.25.
Many investors are getting rid of their shares and there is no buying interest. On top of that, news emerged that Valiant Capital Management and Ennismore Fund Management (two large hedge funds) had decided to take short positions on the stock with a price target of 76, so the decision was taken to suspend the company’s shares pending a statement from it. So far, Plus500 has declined to comment to the media, which has worried investors even more.
People are now recalling how regulators in Hong Kong, Greece and Slovenia, as well as Spain’s CNMV (the National Securities Market Commission), had warned that the company did not have the proper authorisation to provide investment services in some countries. Still, it is worth remembering that in Spain the company has invested heavily in advertising, including its sponsorship of Atlético de Madrid, and has been allowed to operate here until now with no known problems.
While we wait for more news, for now we could say that the blow the company is taking may not end very well.
Featured image: Felix Wong, CC BY 4.0, via Wikimedia Commons.
