- REUTERS/Juan Medina
- Plus500 is an online contract for difference platform, letting people wager money on the movement of assets without actually owning them.
- The company’s five founders sold 7.2 million shares in the business overnight, netting them a combined £80 million.
- Plus500 recently announced its best-ever quarter, helped by crypto trading.
LONDON – The five Israeli founders of London-listed online trading Plus500 shared a £80 million payday on Friday after successfully selling shares in the business.
Alon Gonen, Gal Haber, Elad Ben-Izhak, Omer Elazari, and Shlomi Weizmann sold a combined 7.27 million shares in Plus500 for £11 each, the company said on Friday morning. The placing price represents a slight discount to Thursday’s closing price of £11.69 per share.
Gonen netted the biggest haul, earning £37.4 million selling 3.4 million shares.
Plus500 was founded in Israel in 2008 and listed on the London Stock Exchange in 2013. The company’s shareholders made $50 million at the time of the listing.
The company, which ran into difficulties with UK regulators in 2015, recently announced its best-ever quarter, helped by a surge in popularity for its cryptocurrency products.
Plus500, which sponsors Spanish football team Atletico Madrid, lets retail clients trade contracts for difference (CFD), which are financial instruments that allow people to bet on the price movement of assets without actually owning them.
Traders can gain exposure to stocks or metals, without incurring the higher fees associated with actually buying them. Providers typically offer leverage – borrowed money to invest with – of up to 50:1.
The products are high risk and the entire industry has come under increasing regulatory scrutiny across Europe over the past year. The UK’s Financial Conduct Authority warned in November that cryptocurrency CFDs “are extremely high-risk, speculative products” that “place you at risk of suffering significant losses.” The FCA found that 82% of people who use the products lose money, suggesting CFDs are more akin to gambling than investing.
Plus500’s five founders still own just under 16% of the business. Stockbroker Liberum, which facilitated the sale, said the Founders have agreed not to sell any more shares for 180 days.