A regulatory filing by one of the ‘big boys’ in the asset management space reveals that investment and brokerage arms of JP Morgan Chase have purchased a touch more than 4% of Plus500’s float as of Tuesday, March 11th 2014.
With the underlying expansionary trend in Plus500’s share price after it released stunning quarterly results last month, JP Morgan Asset Management Holdings Ltd. and JP Morgan Securities’ combined holdings are now totalling just a touch over 4% of the company’s float as of today. Aside from giving the company voting rights it has confirmed institutional interest in shares of Plus500.
Forex Magnates reached out to Plus500’s management about the nature of the involvement of JPMorgan. The company replied that they had no further details to add to the official regulatory filing, which states that JP Morgan Chase is holding 4.04% of the company through JP Morgan Assets Management’s stake of 2.7% and JP Morgan Securities’ 1.3%.
The event follows a move in the latter part of February when shares of the company soared higher in the wake of its Q4 numbers and its successful secondary offering. Institutional investors have been keen in the company as Odey Asset Management through its Odey’s Absolute Return Fund is currently holding 7 million shares of the float which totals just above 6%.
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Another big institutional holder is Marlborough Fund Managers Ltd that has already acquired close to 5% of the company throughout the last couple of months. All of this transformation in the company’s ownership has been ongoing as insiders have been cashing out since the middle of December.
Can Positive Momentum Continue?
While shares have been performing strongly ever since the float back in July 2013, and profitability at the company is quite high with operating margins solidly above 40%, the key challenge ahead would be to maintain growth momentum in the face of rising marketing costs. The company has stated that it will focus future efforts on offline marketing, which as we have recently observed with IronFX’s sponsorship deal can be a costly adventure.
The other side of the story is that room for organic growth for Plus500 is getting tight and the firm will be faced with higher client acquisition costs in the coming quarters. While their expansion plans in the Asia-Pacific region could provide substantial numbers, the brand is not yet established across Southeast Asia.