Great results and sell-off of XTB shares, meaning "buy rumors, sell facts"

Perfect results XTB broker in the first half of 2020, they were expected after the first quarter. The publication of positive data, however, coincided with a significant sell-off of XTB shares, which fell from PLN 28,4 to PLN 16,4 within two days at high turnover.

The most famous Polish broker undoubtedly published favorable financial results for the first six months of 2020. Virtually all important factors grew - and significantly -: revenues, revenues, the number of new clients of the company and the average volume of their transactions.

If we compare the results for the first half of 2020 with the same period in 2019, it is not surprising that from mid-April XTB share price was in a permanent upward trend. Over the last 6 months, the company's valuation has increased by over 451%.

This was undoubtedly translated into revenues, which in the first half of 2020 increased to PLN 518,6 million from PLN 88,78 million in the same period last year. The distribution of revenues for individual investors also looks good for the company, as they provided XTB with as much as PLN 428 million (82% of the total) with PLN 89 million from institutional investors (18% of revenues). CFDs on commodities account for a large part of the revenues, which accounted for 40% of the proceeds, and it is not difficult to guess that the turmoil in the crude oil market had the greatest impact.

Revenue from Forex market is only 8,6% of the total, and CFDs on the stock exchange indices, in turn, 49% of revenues, but a curiosity is certainly the fact that a year ago they constituted as much as 84% ​​of the total.

Everyone wants to become an investor

High volatility and sell-off in the stock market caused by the coronavirus pandemic meant that many people felt an opportunity to earn money in the financial market. Virtually all brokers could boast of record increases in clients and XTB was no exception in this respect. In mid-2020, he already had 52 active accounts while in mid-2019 there were 23 of them. The turnover also grew sharply, which increased thanks to the above-average volatility in the markets.

Investors were probably most pleased with the change in net profit, which directly affects goodwill. PLN 293 million against PLN 5,1 million a year ago is a phenomenal result. The average profit per customer also increased significantly in the first half of 2020, which amounted to PLN 9,90 compared to PLN 3,70 in the previous year. On the other hand, the value of customer deposits exceeded the level of PLN 1,04 billion compared to PLN 195 million a year ago.

Buy rumors, sell facts

Therefore, it could be expected that after such results the XTB share price will explode, or at least it will continue its dynamic gains. Especially that from April we could observe a practically uninterrupted increase from the value of PLN 4,47 on April 14.04.2020, 28 to the all-time price record, set on July 2020, 28,4 at the level of PLN 29. A day later, on July 2020, 2020, the results for the second quarter of 30.07.2020 were presented. As we already know, the results were very good, but investors did not react with optimism. After two days, the XTB price was much lower. On 16,4/XNUMX/XNUMX, the company was valued at PLN XNUMX, in turn including one of the largest rockbursts in its history.

Once again, the old stock exchange adage was confirmed:

Buy gossip and sell facts.

XTB stock chart, D1 interval. Source: TradingView.com