UK Edition
Market report: Plus500 to make step up to main market after riding Bitcoin boom
Spreadbetting rising star Plus500 will step up to London’s main market after riding the Bitcoin boom that has almost quadrupled its market valuation in one year.
The company now listed on the junior Aim market has seen its profits surge as retail investors attempt to cash in on the cryptocurrency craze by using a derivative product known as contracts for difference.
Bitcoin’s popularity with everyday investors following a 1,400pc price surge in 2017 helped Plus500’s revenue skyrocket 284pc in the first quarter of 2018.
The revenue boost from Bitcoin breaking into the public consciousness last year has lifted its share price by around 250pc in the last year. Its £1.9bn valuation would comfortably earn it a place on the FTSE 250 index when it makes the step up.
Plus500’s entry into the main market would cap off a major turnaround in its fortunes in the last three years, having faced numerous regulatory clampdowns.
The company said that its promotion would boost its profile and “advance our ambitious global growth plans”. Investors piled into Plus500 on news of its application for main market admission, lifting it 62p to £16.82.
Elsewhere, Paddy Power Betfair jumped 225p to £88.55 after sealing a deal for fantasy sports website FanDuel. The betting giant revealed its intention to snap up the US company shortly after the Supreme Court in the States overturned a sports betting ban in a landmark ruling for the sector.
Davy analyst David Jennings told clients that the terms of the deal were “very favourable” for Paddy Power. The FTSE 100 company has gained “control of one of the most recognised sports brands in the US and a customer database made up almost entirely of want-to-be sports bettors”, he argued.
Electrocomponents surged 101.6p to 730p, a new record high, after maintaining its strong momentum into its new financial year. Greencore’s post-results rally continued after Jefferies lifted its price target from 180p to 205p on the return of “positive vibes”, lifting it 8.5p to 183.5p.
Primark owner Associated British Foods slipped 40p to £27.10 after being downgraded to “neutral” by Goldman Sachs, while Renewi’s revenue-beating expectations boosted the waste management firm 5.9p to 77.5p.
The mood on markets was soured by the persistent threat of trade tariffs after Donald Trump launched a national security probe into car imports. The US president also pulling out of a much-anticipated summit with Kim Jong-un exacerbated the global slide in stocks. The FTSE 100 fell further away from Tuesday’s record high, closing 71.70 points down at 7,716.74.