Plus500 Considers US Listing as Valuation Frustration Mounts

Plus500, a retail broker listed on the London Stock Exchange, is reportedly considering listing its shares in the United States due to frustration over its current valuation. The company is currently valued at £1.42 billion (approximately $1.8 billion), which is more than double its revenue of $832.6 million in 2022 and five times its profit of $370.4 million. The company closed Q1 of 2023 with over $950 million in cash balances and reported revenue of $207.9 million, with an EBITDA of $100.9 million. Analysts estimate that the broker will generate $601.2 million in revenue in 2023, with an EBITDA of $266.9 million and earnings per share at $2.43.

Despite the positive financial results, the broker’s share price has dropped significantly in the last six months, trading at £15.69 compared to a 52-week high of £19.78. To address this, Plus500 has an ongoing share buyback program worth $70 million and distributed $30 million in dividends to its shareholders in 2022. The potential listing of shares in the US is yet to be officially confirmed by the company.

Moving to the US market could provide Plus500 with greater exposure and access to a larger pool of investors. However, it is not without risks, including regulatory differences and the potential for a higher cost of compliance. Nonetheless, Plus500’s strong financial position, along with its positive revenue and earnings forecasts, could make it an attractive investment opportunity for US investors.

Knocking on the Middle East

Plus500 has been expanding its presence in the United States and strengthening its foothold in other regions. It signed in the US market in 2021 with the acquisition of Cunningham Commodities and Cunningham Trading Systems, followed by the launch of a US-specific futures trading platform in Q3 2022. The broker also signed a four-year sponsorship deal with Chicago Bulls, a professional basketball team in the US, after ending its partnership with Atlético de Madrid.

In addition to its US expansion, Plus500 obtained a license from the Dubai Financial Services Authority earlier this year, strengthening its presence in the Middle East. With this, the company now holds twelve regulatory licenses globally. These expansions and licenses may provide the broker with greater access to a wider range of investors and markets, but may also bring regulatory challenges and higher compliance costs. Nonetheless, Plus500’s moves to expand and strengthen its global presence may position the broker for future growth opportunities.

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