The market absolutely hates a shock. With Plus500 (PLUS), some commentators will tell you they foresaw problems, but none could have quite predicted the company abruptly shutting a swathe of customer accounts while it gathered the required documentation to ensure its compliance with 2007 money laundering regulations.
The company's shares went into freefall dropping 280p to 470p as the news spread on Monday and have since hit 424p. The first sign of trouble had actually been sitting in a Facebook post from the company on Friday warning of "additional checks on several trading accounts" before a statement was published on the company's website. Following the nosedive, the company finally made a stock market announcement rebuffing speculation over an interim dividend due on 15 May - it had been paid in full - and providing clarification on the problems, though this could not stop the drop.
The Israeli-based, London-listed company, which allows users to take long and short positions on a variety of market instruments via contracts for difference, gets around half its revenue from the UK. Here, onboarding and anti-money laundering processes have required reviews of documentation, and affected clients have been told that they cannot withdraw, deposit or trade funds until those identifiers have been reviewed. Some 45 per cent of its UK customers have already passed through this process.
