Plus500 (LSE: PLUS), a publicly-listed trading company, has announced a significant purchase of more than 7.3 million ordinary shares from Odey Asset Management LLP. The acquisition , costing approximately £101.3 million, represents roughly 8.2% of the company's issued share capital.

This move aligns with Plus500's capital allocation and shareholder return policy, with the newly acquired shares being held in the company's treasury.

Plus500 Bets on the 'Best Interest' of Shareholders

According to the regulatory filing from today (Tuesday), the company's board believes that the acquisition from Odey Asset Management serves the best interests of all shareholders. As of 31 March 2023, Plus500 reported cash balances exceeding $950 million. This financial strength positioned the company to buy shares at an appealing price point.

Plus500 has made a purchase of 7,327,605 shares at a price of 1,383 pence per share, totaling £101.3 million. The shares were bought at the lowest price in over a year but are still high in historical terms. For comparison, three years ago, one Plus500 share cost 397 pence. Since then, shares have increased by 250%.

"The Purchase has been conducted separately from the Company's latest share buyback programme to purchase up to $70.0 million of the Company's Ordinary Shares, announced on 14 February which will continue as planned," Plus500 commented in a statement. "As at 12 June 2023, the Company had repurchased approximately $52 million of the Company's Ordinary Shares pursuant to the Share Buyback Programme."

Following the acquisition, Plus500's total voting rights will be 82,512,335, with the company holding 32,376,042 ordinary shares in its treasury.

Plus500 Shares Gain after Purchase

In response to the share buyback news, Plus500's listings on the London Stock Exchange rebounded from annual lows of around 1,383 pence, rising by 8.5% to an intraday high of 1,514 pence. At the beginning of 2023, the company's shares reached a record price just below the 2,000 pence level, but they have lost 30% since then.

Currently, the loss since the beginning of the year is about 17%. For comparison, another broker listed on the LSE, IG Group, lost 10% in the same period, while CMC Markets lost 28%. However, this downtrend does not apply to XTB, which has increased by 32% on the Warsaw Stock Exchange in 2023 and tested historical highs a month ago.

Plus500 Mulls US Listing

According to information from last month, Plus500 is evaluating options to list its shares in the United States as an alternative to its existing listing on the London Stock Exchange. Though officially not confirmed, the decision is being fueled by frustration among the broker's management over the company's valuation.

The broker has already disclosed its financials for the first quarter of 2023, revealing revenue of $207.9 million and an EBITDA of $100.9 million. Analysts' consensus predicts that the broker will achieve a revenue of $601.2 million in 2023, accompanied by an estimated EBITDA of $266.9 million and earnings per share of $2.43. Notably, this debt-free company concluded the first quarter with a substantial cash balance exceeding $950 million.

Plus500 is actively expanding its operations in the United States. The company made its entry into the US market in 2021 through the acquisition of Cunningham Commodities and Cunningham Trading Systems. In Q3 2022, the company took a significant step by introducing a proprietary futures trading platform tailored specifically for the US market.