BlackRock picks up $152 million, 7% stake in CFD broker Plus500

Plus500 office

LeapRate has learned via regulatory filings that FCA regulated online CFDs broker Plus500 Ltd (LON:PLUS) has acquired another large institutional shareholder, with US investment giant BlackRock Inc. (NYSE:BLK) picking up a 7.02% interest in Plus500.

At current market prices of £14.48 for PLUS the BlackRock stake in Plus500 is worth £115.8 million (USD $152 million). Most of the interest was acquired in the form of Plus500 shares, while about about one-third of the stake is being held by BlackRock in the form of Plus500 CFDs.

BlackRock is the world’s largest asset manager with more than $6.2 trillion in assets under management.

We had reported exclusively earlier this month that Luxembourg based private label fund manager Axxion S.A. had built up a 5% ownership position in Plus500.

The increase in institutional ownership at Plus500 comes after a more than 25% drop in Plus500’s share price (see chart below) since the company hit all-time highs in early August at above £20 per share. The drop came as Plus500 reported second quarter results which were strong but not nearly as spectacular as a record-setting Q1. And, as new regulations hit the EU CFD brokerage business limiting the leverage which traders can use. Plus500’s share price has been dragged down further after slowing results with negative outlook warnings were issued by two of its key rivals in the UK online trading sector, IG Group and CMC Markets.

The institutional purchases also follow the recent sale by two of Plus500’s largest shareholder groups – the company’s founders and Playtech plc – of more than $400 million worth of Plus500 shares in separate secondary placements. Playtech is now fully out of the Plus500 stake it first acquired in 2015 when it attempted to acquire the company. Plus500’s founders group now owns just 7.7% of the company.

Plus500 shares 1 year graph Sept2018

Plus500 one year share price. Source: Google.

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