The one thing that the market hates most is uncertainty. Unfortunately, Plus500s (LSE: PLUS) business has been shrouded in a cloud of uncertainty for some time, and news flow over the past week has only increased tensions.
These tensions revolve around Plus500s money-laundering controls. The company only checks customers identity when they try and withdraw funds from its platform.In comparison, almost all of the companys peers conduct background checks before customers are allowed to deposit funds.
Plus500 has come under scrutiny for its lax money-laundering controls in the past.However, to date the company has managed to sweet-talk its way out of any prohibitive sanctions from regulators. UK regulators have tried to nudge the group towards stronger controls, though
The big freeze
It would appear that regulatory requirements have finally caught up with Plus500. Last week the company froze the assets in around half of its UK client accounts afterimplementing certain enhanced clienton boardingand Anti-Money Laundering (AML) processes which have resulted in additional documentation checks being required on existing and new Plus500UK customer accounts.
There was also speculation that the group had failed to pay its $65m dividend. These rumours have been denied by the company this morning.
Time to buy?
Its clear that the market has been spooked by therumourssurrounding Plus500. Over the past five days, the companys shares have fallen by more than 40%.
And after the confusion its difficult to tell if the company is attractive at present levels.
City figures currently suggest that the group will earn 69.2p per share this year, giving a forward P/E of 10.8. A dividend yield of 5.5% is expected.
Nevertheless, theres no telling how the events that have unfolded over the past few days will affect Plus500s sales for the rest of the year.
Plenty of mistakes
Moving on, Monitise has also made plenty of mistakes in the past. Indeed, ever since the group became a public companyduring 2007, it has continually missed expectations and been forced to ask shareholders for more cash.
Whats more, it remains to be seen whether or not the company can actually turn things around.
Still, the appointment of a new CEO, Elizabeth Buse, has given the market a new reason to trust the company. Elizabeth Buse built her reputation at payment giantVisa, so she knows how to handle an international payment processor, something Monitises previous CEO lacked.
A strong base
Monitise has built a strong base to grow from over the past few years. The group has built a number of invaluable key relationships with key banks since 2007, and its relationships that will drive the companys future growth.
The most recent deal between Monitise and a big-bank partner is an agreement between Monitise and SocGen to deliver mobile banking solutions across Africa.
Nevertheless, one of the key reasons why Monitises shares have fallen to new lows is the lack of trust between the company and its shareholders.
With a trail of disappointments behind it, Monitise has to be able to prove to investors that it can be trusted once again and meet its own lofty growth targets. Monitise is targeting 200m active users by 2018.
Until the company can rebuild trust, it might be wise to stay away.
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