BlackRock Holds Below 5% Stake in Plus500 Following Sell-Off

The asset manager has hardly made any profit from this investment.

BlackRock, a New York-based asset management company, has diluted its stake in Plus500 (LON:PLUS) and is currently holding less the 5 percent of the brokerage’s shares, according to a Monday’s London Stock Exchange (LSE) filing.

As Finance Magnates reported earlier, the asset manager took a little over 7 percent stake in the London-listed broker in September 2018. That decision was made when the brokerage shares slumped at around 20 percent from its record high, which was achieved in August 2018. However, Plus500 shares continued to go down, even after the institutional interest, before pivoting to a steady bull run since April last year.

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Plus500 has doubled its value since the dip in March when the global equities market saw a tremendous sell-off triggered by the COVID-19 uncertainties, and its shares are now trading at around £15 apiece. 

This is almost the same price at which BlackRock purchased the brokerage shares. Hence, the asset manager with over $6.8 trillion under management broke even or hardly made any profit from this investment.

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In August, the Israel-based brokerage published its half-yearly financials for the first half of 2020 that included the market madness in March. The broker’s revenue for the period jumped 281 percent year-on-year to $564.2 million, and that also ticked its publically-listed shares to go upward.

Buyback Is Ongoing

Additionally, the brokerage is actively buying back its own shares from the market under the latest repurchasing scheme with its commitment to pull $67 million in its own shares from the market by the end of February 2021.

Since the announcement of the buyback plan, Plus500 is repurchasing its shares almost every day and has already spent over £10 million in the process.

The latest filing with the LSE revealed that the broker bought 25,648 of its own shares on Monday, spending around £399,459 in the process.

Meanwhile, the brokerage is planning to expand its operations by entering into physical equity trading, meaning it wants to become a full-fledged stockbroker rather than an online contract for difference (CFD) provider.

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