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Plus500
British international financial firm From Wikipedia, the free encyclopedia
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Plus500 is an Israeli-founded London-based firm that provides online trading services in contracts for difference (CFDs), share dealing, futures trading and options on futures. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
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History
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The company was founded in 2008 by six alumni of the Technion.[3]
In 2013, Plus500 became a publicly traded company on the Alternative Investment Market of the London Stock Exchange. Its market cap was $202 million.[4][5]
The company launched its Windows Store app in 2014.[6]
In 2014, the Financial Conduct Authority (FCA) launched a review into how the organization signed up new customers. The investigation came about due to concerns raised by its rivals. Alledgedly, Plus500 only verified client identities when they withdrew funds rather than during account registration.[7]
2016–2024
In January 2016, Plus500UK resumed onboarding new customers in the UK.[8] In the same year, Plus500IL Ltd., the company's Israeli subsidiary, received a Trading Arena Licence from the Israel Securities Authority (ISA). In September, Plus500 launched an Apple Watch app to trade and view account details.[9]
In the fall of 2016, Plus500's founders sold 13% of the company's shares, raising £100.75 million but causing a 16% stock drop. They retained a 22% stake.[10]
In December 2017, Plus500's Singapore subsidiary, Plus500SG Pte Ltd., obtained a Capital Markets Services license from the Monetary Authority of Singapore (MAS) to trade in securities and leveraged forex.[11]
In June 2018, Plus500 launched an Economic Calendar, providing global financial events and indicators in partnership with Dow Jones & Company, along with a list of impacted instruments per event.[12] That same month, shares of Plus500 were listed in the main market of the London Stock Exchange, and the company joined the FTSE 250 Index of leading mid-cap firms.[13][14] By 2018, Plus500's trading apps supported 32 languages, including English, German, Italian, Spanish, French, Arabic, and Chinese.[15] By the end of 2018, Plus500 reported a 33% increase in revenue, reaching $437.2 million (£314.7 million) compared to $327.9 million in the previous year. Net profit rose by 70% to $199.7 million.[16]
In 2021, Plus500 appointed Jacob A. Frenkel, former chairman of JP MorganChase International and former governor of the Bank of Israel, as chairman.[17] the company announced its agreement to acquire Cunningham Commodities LLC and Cunningham Trading Systems LLC, finalizing the acquisition by July as part of its expansion into the U.S. futures market.[18][19]
During the summer of 2021, Plus500 opened a new R&D center in Tel Aviv[20] and introduced "Plus500 Invest," a stock-trading platform featuring over 2,000 instruments.[21] By the third quarter of 2021, the company reported having 166,310 active clients.[22]
In March 2022, Plus500 acquired Japan-based EZ Invest Securities, specializing in securities and derivatives trading.[23] Later, in September, it launched TradeSniper, a futures trading app for U.S. retail clients.[24]
In August 2024, Plus500 announced plans to return $185.5 million to shareholders through a $110 million share buyback and $75.5 million in dividends. The company benefited from global volatility driven by events like the Covid-19 pandemic, 2022 Russian Invasion of Ukraine, and a conflict in Gaza since 7 October 2023 and expects to benefit from the U.S. elections in November 2024. Plus 500 also intends to focus on expanding into the U.S., UAE, and Japanese markets.[25][26]
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Model
Plus500's customers trade contracts for difference (CFDs) on their smartphones or computers. Some consider CFDs to be high risk. While companies operating in high-risk sectors use hedging to limit their exposure to market volatility, Plus500's model relies less on this practice than comparable businesses in this sector. Therefore, their customer's losses are their gains and vice versa.[27]
Controversies and legal issues
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Platform failures and financial discrepancies
Plus500 has faced numerous complaints over platform failures and questionable practices, with reports of clients wrongly accused of market abuse and profitable trades canceled.[28]
In February 2019, The Times highlighted discrepancies in Plus500's financial reporting. While the company's 2017 Annual Report stated it had no net revenues or losses from market P&L in 2015-2017, a later report revealed a $103 million loss from client trading activity in 2017.[29]
Lawsuits and fines
In October 2017, several hundred former clients filed a lawsuit against Plus500, accusing the broker of failing to manage their money adequately. In addition, the broker's platform operated with numerous failures, due to which clients were often unable to close positions when they wanted to.[30]
In 2021, the Tel Aviv District Court approved a $29 million class action against Plus500 Israel. It was alleged that during the Brexit referendum's volatile aftermath, Plus500 restricted trading in put options for 90 minutes, selectively allowing call options, to prevent customer profits.[31][32][33]
On 14 September 2023, a second class action was filed in Australia, alleging that Plus500 engaged in misleading and unconscionable conduct by selling high-risk investments that led clients to financial losses from November 2017 to March 2021.[34][35][36]
Marketing and sponsorships
Plus500 uses an affiliate marketing model and to target potential clients on social media platforms like Facebook and Instagram.[37] The organisation's aggressive affiliate marketing programme has attracted scrutiny from the financial industry. Their affiliate marketing programme allowed website owners to earn commissions for new client referals.[7]
In 2015, Plus500 became the Atlético de Madrid's main sponsor and kept that title for the next 7 years until June 2022.[38] The company expanded its sports sponsorships in 2016 with the ACT Brumbies of Super Rugby,[39] in 2020, signed with three football clubs: Swiss Super League champions Young Boys,[40] and Poland's champions Legia Warsaw.[41] In 2023 beIN Sports blacked out Serie A club Atalanta and Young Boys broadcasts due restrictions on CFD advertising by the Autorité des marchés financiers (AMF).[42]
In 2022, Plus500 entered a multi-year partnership with the NBA's Chicago Bulls[43] and launched an advertising campaign featuring actor Kiefer Sutherland in the United Kingdom, Italy, the Netherlands, Germany, and Australia.[44]
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References
External links
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