[Update:by the afternoon Plus500 announced completion of the deal, and its share price had recovered from intra-day lows]
With shares of CFD broker Plus500 at an all-time high, the company has announced a proposed secondary offering by founders. Up for sale are 20 million shares priced at 500p, versus yesterday’s closing price of 556p. The sale is the largest for founders since the company’s IPO when over 28 million shares were sold by insiders along with 14.4 million new created shares, for a total of 114,888,377 outstanding shares.
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The sale comes as insiders have been trimming their positions during the stock’s 360% ascent from an IPO price of 120p to its current levels. Recently, shares have been boosted by record Q4 earnings reported last week. At its current proposed offering price, the secondary will raise £100 million before expenses attributed to sale. Leading the sale is Alon Gonen, Managing Director at Plus500, who is placing 9,352,010 shares, along with CEO Gal Haber, VP Elad Ben-Izhak, Omer Elazari and Shlomi Weizmann. Following the sale, this founders group will continue to hold 40.9 million shares, or 35.63% of the company.
On the news, shares will be expected to trade lower due to the increased supply coming to the market. However, as prices have been rising, there has been a steady demand taking place for Plus500 shares among asset managers and retail investors as witnessed by several investment houses reporting that they had surpassed the 5% threshold of ownership. (Update: Shares of Plus500 (PLUS.L) are lower by 11% to 502p in early trading)
Forex Magnates reached out to the broker for comment about the sale. Responding for the firm was Elad Even-Chen, VP Business Development, Head of Investor Relations & Company Secretary at Plus500 who stated that “Regarding the secondary, I can say that due to strong institutional demand following record 2013 full year results from the Company, the founders of Plus500 have agreed to dilute their combined holding in the Company by 32.8% via a private placing. This represents a positive step for the Company, as it enables greater liquidity in our stock and enables both new and existing institutional shareholder to invest in our business. As a management team we have made public our aspiration to move to the main market in London and today’s proposed placing forms an important part of plan.”