Controversial trading firm Plus500 was at the centre of another City storm on Friday as a bleak warning over slumping revenues hit its shares and details of huge payouts for its bosses emerged.
The Israeli-based, London-listed firm is the UK’s biggest provider of contracts for difference, which allow punters to take leveraged bets on stocks, indices and currencies.
But it warned becalmed financial markets had sent trading revenues tumbling to $53.9 million (£41.2 million) in the first three months of 2019, a far worse-than-expected 65% slide on the previous quarter.
Plus is also feeling the effects of a crackdown by European regulators since last August.
Chief executive Asaf Elimelech said financial markets were “surprisingly subdued” and described the revenue fall as “disappointing”.
But the figures also showed the steady rise in markets working against Plus as its clients won $28.1 million from the unhedged firm over the quarter.
A panicked City sent the shares down over 40% at one stage, before recovering slightly to a fall 169.4p or 24% at 550p, after its second major warning in two months.
Shares in the company are more than 70% below peaks above £20 last August when it was riding the bitcoin boom.
Other big players in the sector suffered, with IG Group’s shares down 4% and CMC Markets 6%. Peel Hunt analyst Anthony Da Costa said: “There is risk that the low trading activity in Q1 is a new normal.”
Plus took a hammering in February after a warning following months of seemingly shrugging off the crackdown in earlier statements.
It also revealed details of client profits and losses for the first time, and admitted to “drafting errors” in its annual report after previously telling investors it had not suffered losses from client positions in 2016 and 2017.
The share price carnage was accompanied by the latest annual report which revealed salaries more than doubling to $6 million for Elimelech and finance director Elad Even-Chen.
The lion’s share of the payout was linked to last year’s profits plus a “discretionary” $1 million payout. The firm suffered a pay revolt from its investors at its annual meeting in January.
Last September the founders, including managing director Gal Haber, sold off an 8% stake in the company for 1550p, landing £145 million.
