XTB, kicking and punching it’s way to $1bn

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XTB, with a little help from major sponsorship and partnership deals with fighters like Conor McGregor, and football manager Jose Mourinho XTB is now worth over $1bn.

Jakub Zablocki taking profit

The Co-founder of XTB Poland’s billion dollar broker announces his intention to sell 6.0% of the compnay. The main shareholder of Polish margin trading brokerage XTB has decided to take some money off the table and has filed details of his intention to sell 7.0 million shares of XTB which represents just under 6.0% of the company’s stock.

One of the hardest things in trading is knowing when to lock in your profit

XTB co-founder, Jakub Zablocki is selling 5.96% of XTB that’s owned by his holding company XX ZW Investment Group.

  • XTB, which is listed in Warsaw, trades at Zloty 38.38, the equivalent of some £7.40 per share.
  • At current prices, the sale of XTB stock is expected to raise around $65.8 million or £57.25 million.
  • Mr Zablocki co-founded XTB in 2003 and the company listed on the Warsaw Exchange in 2016.
  • Mr Zablocki served as the firm’s CEO, between January 2014 and January 2017.

He is still actively involved in the business but is also focused on investing in and growing technology companies. Following the sale, XX ZW Investment Group will still own just over 61% of XTB

XTBs $1bn valuation

XTB shares recently traded above 43 Zloty, which was an all-time high for the stock, and part of a six-month rally that saw the stock increase by almost 40%. That rally took the firm’s valuation to more than $1.2 billion or £1.0 billion.

A large chunk of those gains came after the publication of the firm’s Q1 2023 results in late April, which showed it had generated $128 million in revenues alongside $73.0 million in net profits.

  • Earnings that were no doubt boosted by the firm’s acquisition of more than 100,000 new clients.
  • The newly acquired billion-dollar valuation has been dented by the news of Jakub Zablocki’s proposed sale of stock, with XTB shares falling around -11% since the publication of the filings.
  • The seven million shares that are in line to be sold represent some 90 days’ worth of average daily trading volumes in XTB stock.

Presumably, some kind of institutional book building or placing will be required to find a new home for this sizable stake in the company.

Billion-dollar brokers

XTB is one of a handful of publicly forex platform and multi-asset CFD brokers and the market capitalisations of these businesses can vary dramatically.

In the UK, Hargreaves Landsdown (HL) is valued at £3.80 billion whilst CMC Markets (CMCX) has a market cap of just £505 million.

The largest margin trading broker in the world is London-listed IG Group, which is worth £2.90 billion, based on its current market cap.

Impressive though that number is, it’s just a fraction of the $31.7 billion valuation enjoyed by Interactive Brokers (IBKR) which itself is trumped by the $86.6 billion valuation of US peer Charles Schwab (SCHW).

Jakub Zablocki’s proposed sale of XTB stock will probably be a good thing in the longer term, as it will allow outside investors to take a stake in the company. Which is healthy from a corporate governance standpoint.

The firm’s billion-dollar valuation is impressive, but what matters most to the market is consistency and visibility in earnings and profitability combined with a clear strategy as to how that will be achieved. If XTB can deliver that, then there is no reason why their valuation shouldn’t continue to grow.

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