Yahoo Finance CMC Markets boss loses almost £200m as shares plunge
Shares in CMC Markets collapsed after warning of a sharp fall in profits as the pandemic trading boom fizzles out, wiping almost £200m off the fortune of its boss, Lord Cruddas.
The FTSE 250 spread better now expects full-year operating profit to be between £250m and £280m, down from more than £330m.
CMC blamed the worse-than-expected performance on "subdued market activity and reduced volatility" during the summer that is expected to continue for the rest of the year.
Shares were 27pc lower at 306p in afternoon trading, valuing the company at just under £900m.
The slide slashed about £188m off the paper fortune of Lord Cruddas and his family, who own a majority stake in the business.
CMC said Lord Cruddas declined to comment.
The slide comes after rival Hargreaves Lansdown issued a similar warning last month and said the pandemic-induced trading boom will not last.
Investment platforms were boosted by bored Britons trading volatile stocks during the pandemic, but the uptick in customer numbers and volumes has subsided as economies reopened.
CMC said: “Beyond the recent moderation in market activity, the group continues to have confidence in the long-term growth opportunities of the business.”
Once dubbed the wealthiest man in the City, Lord Cruddas became embroiled in a political storm earlier this year after donating £500,000 to the Conservative Party just three days after he was admitted to the House of Lords.
Labour suggested that the contribution had been connected to Boris Johnson’s decision to hand the former Tory party treasurer a peerage in a move that went against the advice of the Lords’ appointments committee.
Lord Cruddas defended his donation and said there was no link between it and his appointment to the upper chamber.
CMC was also criticised in July by ISS, the powerful proxy adviser, who told shareholders to vote against the company's pay report due to its chief executive's “excessively high” salary bump.
His 57pc pay rise to £700,000 was deemed too high for a FTSE 250 boss, according to ISS, but the resolution passed with just 10pc of investors voting against at CMC's annual meeting.
