Author Topic: PLUS.LN - Plus500  (Read 11483 times)

Andy Dufresne

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Re: PLUS.LN - Plus500
« Reply #10 on: May 19, 2015, 08:51:23 AM »
Disclaimer:

1. No position ever;
2. I personally know the two main founders, though I have not spoken to them in a few years;

@bantrader

Disagree this doesn't change the fundamentals of the company for 2 reasons:

1. In order to process documentation upfront as the FCA wants instead of when someone wants to withdraw money (which is maybe for 5-10% of their customers in my estimation), as they've done to this point, they require a good additional amount of G&A expenditure - remember they recruit roughly 350 new "players" per day (33K in Q1) and the documentary burden for so many people isn't small. Also, these employees need to be of a certain standard and located in the UK, which is more expensive for the copmany.

2. Because of the increased regulatory burden upfront, the company will convert fewer free customers to paying ones. I have no idea how significant this is, but I suspect its somewhat meaningful otherwise they would have done this earlier rather than risking this warning shot from the FCA. Add to this paying customers who will leave and many that will not join as the company has suffered a PR blow and perhaps the profitability and cashflows are seriously lowered. I saw someone estimate them losing 40m revenues, which is 15% of their FY2014 revenues - not an insignificant amount IMHO.

@wrister

I agree that this is a sad churn business, where suckers don't die they just rotate. However:

1. The two main founders (MD Alon Gonen and CEO Gal Haber) are top notch and extremely capable - they know their market, their customer, their product and their marketing. I would not bet against them - they have always made money and have always found a way to improve. Here is an English version of the only media interview I know of with Gonen:

http://www.globes.co.il/en/article-alon-gonen-we-want-to-make-plus500-big-1000990800

Before PLUS500 these guys had an online gambling business which they sold as they perceived it becoming too tough in terms of regulation / inability to get funds from players due to credit card companies' restrictions. They just understood that CFD is legal gambling and that they could do it better.

2. Gambling has always had a place in human history and this shall continue. If WEB and CM have taught us something its to look for recurring behaviors, which lead to predictable cashflows. In this growing online legal gambling / CFD trading world there is still a good amount of room.

Just my 2 cents ...
« Last Edit: May 19, 2015, 11:03:28 PM by Andy Dufresne »


bantrader

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Re: PLUS.LN - Plus500
« Reply #11 on: May 19, 2015, 05:56:10 PM »
Disclaimer:

1. No position ever;
2. I personally know the two main founders, though I have not spoken to them in a few years;

@bantrader

Disagree this doesn't change the fundamentals of the company for 2 reasons:

1. In order to process documentation upfront as the FSA wants instead of when someone wants to withdraw money (which is maybe for 5-10% of their customers in my estimation), as they've done to this point, they require a good additional amount of G&A expenditure - remember they recruit roughly 350 new "players" per day (33K in Q1) and the documentary burden for so many people isn't small. Also, these employees need to be of a certain standard and located in the UK, which is more expensive for the copmany.

2. Because of the increased regulatory burden upfront, the company will convert fewer free customers to paying ones. I have no idea how significant this is, but I suspect its somewhat meaningful otherwise they would have done this earlier rather than risking this warning shot from the FSA. Add to this paying customers who will leave and many that will not join as the company has suffered a PR blow and perhaps the profitability and cashflows are seriously lowered. I saw someone estimate them losing 40m revenues, which is 15% of their FY2014 revenues - not an insignificant amount IMHO.

@wrister

I agree that this is a sad churn business, where suckers don't die they just rotate. However:

1. The two main founders (MD Alon Gonen and CEO Gal Haber) are top notch and extremely capable - they know their market, their customer, their product and their marketing. I would not bet against them - they have always made money and have always found a way to improve. Here is an English version of the only media interview I know of with Gonen:

http://www.globes.co.il/en/article-alon-gonen-we-want-to-make-plus500-big-1000990800

Before PLUS500 these guys had an online gambling business which they sold as they perceived it becoming too tough in terms of regulation / inability to get funds from players due to credit card companies' restrictions. They just understood that CFD is legal gambling and that they could do it better.

2. Gambling has always had a place in human history and this shall continue. If WEB and CM have taught us something its to look for recurring behaviors, which lead to predictable cashflows. In this growing online legal gambling / CFD trading world there is still a good amount of room.

Just my 2 cents ...

Thank you for your point of view

Great link with the interview with the founder.

writser

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Re: PLUS.LN - Plus500
« Reply #12 on: May 20, 2015, 01:13:34 AM »
Looks like Gotham Research is getting involved too: https://twitter.com/GothamResearch  . The saga continues :) .
I'm sorry if I have offended you. Please contact this forum's safe space coordinator to work thing out.

@thewritser

bantrader

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Re: PLUS.LN - Plus500
« Reply #13 on: May 20, 2015, 06:29:08 AM »
Looks like Gotham Research is getting involved too: https://twitter.com/GothamResearch  . The saga continues :) .

In this case , Gotham comments are very superficials.
Gotham is not providing strong short thesis here,
They just want to jump on the bandwagon with some beginner techniques such as retweeting a tweet from a recently created twitter account with only one tweet in the track record ..... It seems a bit suspicious to me.

Take a look on the last retweet from Gotham:
https://twitter.com/GothamResearch



writser

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Re: PLUS.LN - Plus500
« Reply #14 on: May 22, 2015, 01:53:41 AM »
The saga continues. For those interested, a new 10-part blogpost from somebody short Plus500: http://www.cablecarcapital.com/your-capital-at-risk-part-1/ . Latest FT post: http://ftalphaville.ft.com/2015/05/19/2129746/where-are-plus500s-customers/ . Shares down 65% over a couple of days.
« Last Edit: May 22, 2015, 01:59:01 AM by writser »
I'm sorry if I have offended you. Please contact this forum's safe space coordinator to work thing out.

@thewritser


magno111

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Re: PLUS.LN - Plus500
« Reply #16 on: May 22, 2015, 05:07:37 AM »
think by yourself

Andy Dufresne

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Re: PLUS.LN - Plus500
« Reply #17 on: May 22, 2015, 05:13:16 AM »
Short thesis about PLUS 500

http://www.cablecarcapital.com/your-capital-at-risk-part-7/

I believe writser had the same link to the short thesis 2 posts prior to yours ...


Andy Dufresne

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Re: PLUS.LN - Plus500
« Reply #19 on: June 01, 2015, 01:18:54 AM »