Plus500 shares more than recover from drop after Playtech deal canceled


Well it has taken a few days, but it looks like stock market investors are once again getting behind an independent Plus500 Ltd (LON:PLUS).

Plus500 w marginWe had reported soon after details emerged of Playtech cancelling its acquisition of Plus500, that shares of both companies were taking it on the chin. Playtech traded down more than 10%, as investors had apparently viewed their planned purchase of Plus500 as a shrewd buy – and now a lost opportunity. And Plus500 initially traded down even more, with investors becoming jittery about the company’s prospects as a once-again independent company.

However after a couple of days of reflection and looking at the facts, it seems as though investors and traders have changed their minds, and now view Plus500’s prospects much more positively. Plus500 shares actually traded above Playtech’s £4-per-share offer for a while yesterday, before settling to close Wednesday at £3.95, still up 8% on the day.

Plus500 share price Nov2015

Plus500 share price past 5 days. Down, then back up and more. Source: Google Finance.

So what happened?

Well we believe that investors just took time to look at the facts.

After having some problems earlier this year in their UK unit, Plus500 reported amazing results in Q3, with revenues topping $80 million for the quarter for just the second time. Were Plus500 to continue that trajectory, it is not inconceivable at all that Plus500 shares could return to the lofty £7-8 level they traded at before the company hit those regulatory speed bumps earlier in the year.

Plus500 revenues quarterly 2015

 

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Plus500 shares more than recover from drop after Playtech deal canceled

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