Today’s RNS from Plus500 (PLUS) does not allow hard sensible conclusions. I know that Odey has bought again and I also know that the fund manager in question is not even remotely an idiot – a fact that I established over an extended lunch at Le Gavroche.
However, and starting with the “Group Summary”, the facts (Plus500 had better have got these right) there stated are as stated. But no more. All the statistics as regards customer recruitment mean nothing until they reflect what has happened and is happening subsequent to last week’s collapse. And it is too early to assemble these on a statistically significant basis.
They refer to “Group cash” of $92.2m. But what happens if people sue for a refund of their money which has been improperly held back? Or regulators compel such refunds? It must be remembered that I am reliably advised that customers who have sought to be paid out have been fobbed off with the advice that since market abuse is suspected their accounts are frozen pending a review (by Plus500 of all parties!). At what point have customers just given up trying to get their money back? How much is thus involved? And how much has been credited to profit and loss account as reported to the market?
Well, none of these questions have been answered. So anybody who buys Plus500 as an investment is taking a leap of faith which, by generally understood common sense tests, is not justified. I know it is hard to borrow stock. But I keep at it.