Plus500 has taken advantage of Crispin Odey’s departure to buy back 8.2% of their shares. The Israeli-based but London-listed CFD broker, has been able to purchase a significant block of its own stock, from a fund manager, at a discount to yesterday’s closing price. The transaction was made in addition to Plus500’s ongoing share buy-back scheme.
PLUS500 continues to buy back shares
Plus500 has bought 7,327,605 shares of its own stock at a price of £13.83 per share which represented some 8.20% of the outstanding share capital.
The firm spent £101.30 million pounds on the transaction though for now at least, these shares are not being cancelled but instead will be held in the firm’s treasury.
Odey Asset Management & Plus500?
The large block of stock was sold by Odey Asset Management whose founder, Crispin Odey, has recently exited the business, following numerous allegations of inappropriate behaviour. In the wake of Odey’s departure, his former partners seem to be divesting some of his holdings as the money manager has also sold its entire stake in electrical retailer AO World, to Mike Ashley’s Frasers Group.
Crispin Odey was a high-profile London hedge fund manager known for his bold directional trades, which included numerous short positions, many of which failed to pay off.
However, in 2022 the fund banked returns of 152%, its best-ever performance, thanks to huge short positions in UK Govt debt, which fell in value as inflation and interest rates rose.
Plus500 announced the deal in a regulatory news release, published this morning, in which Plus500 management said that:
“Given the significant strength of the Company’s balance sheet and the prevailing circumstances, the board believes the purchase is in the best interest of all shareholders. The Company has acted quickly to execute this opportunity to acquire shares at an attractive price, in line with the company’s capital allocation and shareholder return policy.”
Prior to the purchase, Plus500 had $950 million or £750 million of cash on its balance sheet and had spent $52.0 million buying back its own stock, under its existing share buyback mandate, with which it can still repurchase another 683,000 shares.
Plus500 share price reaction
Plus500 shares are up by 98p or just over 7.00% today at £14.88 well over a pound above the price that the company bought Odey’s holding at, so shareholders should be pleased with the trade, not least because it removes a sizeable overhang in the stock from the market.
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