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Plus500 Shares Down By 40%. Is this Company a Fraud?

On Monday, Plus500 surprised the market with the announcement that, in addition to the payment of its dividend, the company was implementing “certain enhanced client on boarding and Anti-Money Laundering (AML) processes which have resulted in additional documentation checks being required on existing and new Plus500UK customer accounts”. This means that thousands of UK accounts are now frozen.
In short, business was going to grind to a halt. Cue the indiscriminate wave of selling, even in unrelated Israeli company XLMedia, with Plus500 shares now down 45% in the past five days.
Is this a quality business though?
We can’t have total faith on this last point but the more pressing question seems to be whether this is really a high quality, scalable business?

Shorts have been far too quick to dismiss this company. From marketing expertise to technology, these guys are first-class. For example, I have read some criticism that Plus500’s low-cost marketing will never beat the expensive sponsorships of bigger companies…one look at the development of online gambling tells you that these small companies end up owning the industry. It isn’t “low-cost”, it is high ROI. 95% of Plus500’s competitors will either adapt or get destroyed by operators with these online marketing skills.
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