Yahoo Finance IG Group revenues boosted by GameStop stock market trading
The frenzy of stock market trading linked to “meme stocks” such as GameStop has helped the investing website IG Group attract a record number of traders.
Retail investors piled into shares including GameStop, a US video game retailer, after users on the social media website Reddit banded together to raise its price. The share price surge drew massive interest, including from people who had never invested before, as retail investors hoped for the chance of giving Wall Street a black eye.
The biggest winners from the rapid stock market gains during the retail trading mania remain unclear, but the surge in trading volumes has helped spreadbetting companies such as IG and its rival, CMC Markets, which allow speculation on shares.
IG, a member of the FTSE 250 index, said it made revenues of £230m in the three months to 28 February, 65% higher than the same period last year.
June Felix, IG’s chief executive, said it had been “one of the busiest periods in IG’s history” as it coped with the influx of new customers drawn by widespread media coverage of the Reddit investing phenomenon.
IG added 40,300 new clients during the quarter, with a total of 230,100 active over the period.
It is understood that the first day of the GameStop frenzy was its record day for new customers, with six times more sign-ups than its previous record – the day when the drug company Pfizer announced positive results for the first coronavirus vaccine. IG eventually banned customers from making leveraged bets on GameStop shares, which have been through volatile trading ever since.
Most of IG’s revenues come from spreadbetting, but its smaller business executing share trades also jumped to £14m, up 600% from the same period last year, as investors tried to jump on the Reddit bandwagon.
The company, which focuses on wealthier customers who are subject to less regulatory scrutiny, turned away thousands of would-be customers during that period as it coped with the influx.
They were “exceptional levels of trading activity”, IG said in a statement to the stock market on Thursday. It expected to benefit permanently from revenues from the extra customers. Its shares gained nearly 5% on Thursday.
