Institutional interest in retail broker Plus500 continues to grow. On Tuesday, asset manager Blackrock submitted a standard form for notification of major holdings to the London Stock Exchange.
Blackrock’s form indicates that it has taken a 7.02 percent stake in Plus500. Of that 7.02 percent, the asset manager acquired 4.85 percent through shares and another 2.17 percent through other financial instruments.
Interest in Plus500 has intensified after a 20 percent drop in its share price in mid-August. That slump in price was quickly followed by another as the founders of the contracts-for-differences (CFDs) broker sold off eight percent of the company’s shares.
Odey, Blackrock, and Axxion
Two weeks ago, Crispin Odey’s hedge fund – Odey Asset Management – began acquiring shares in the company again. His new investment saw Odey Asset Management increase its stake to over 10 percent.
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Odey has been investing in Plus500 for several years, but his fund’s stake in the broker fell below five percent in early 2018. In the past, Odey Asset Management was a vocal opponent of the deal between Plus500 and PlayTech.
Alongside Odey, Axxion has also invested in Plus500. Earlier in September, the London Stock Exchange news service released documents that showed the private equity firm had taken a five percent stake in the CFDs broker.
As a result of Blackrock’s investment, institutional investors now control approximately 25 percent of Plus500. What plans they have for the firm are unclear.
Although it may have had a record-breaking half-year in the first six months of 2018, Plus500 is unlikely to repeat such a performance in the near future. Those results were largely driven by a boom in cryptocurrency trading that has since tapered off.
On top of this, the European Securities and Markets Authorities latest regulations are likely to dent the firm’s revenues. With trading volumes down and client acquisition becoming even more difficult, it may be a while before we see a Plus500 performance akin to the one seen in the first half of 2018.