UPDATE 2-Move over pandemic, GameStonk frenzy drives IG revenue

* IG third-quarter revenue surges 65%, shares up 4%

* Number of active clients up 60% to new record

* IG had ‘unprecedented spike in new client demand’ (Adds share move, details on targets)

March 11 (Reuters) - Online trading platform IG reported a surge in third-quarter revenue on Thursday, thriving on the retail frenzy in stock markets this year that propelled shares in some beaten-down U.S. stocks higher.

IG, which gives retail investors leveraged access to more than 17,000 financial markets through its platform and mobile apps, said the number of active clients leapt 60% in the three months to Feb. 28 from a year ago to a record 230,100.

“The group saw an unprecedented spike in new client demand, largely in response to heightened news flow relating to certain listed U.S. stocks,” IG said in a statement on Thursday.

Shares climbed 4% to 8.4 pounds by 0835 GMT.

IG said it expected to hit its three-year revenue target of 160 million pounds ($223 million) from its “Significant Opportunities” portfolio, which includes some U.S. and European products, by the end of the 2021 fiscal year, a year ahead of schedule.

Overall, IG’s third-quarter revenue jumped 65% to 230.3 million pounds, even though last year’s performance had already been strong thanks to a pandemic-led selloff and a crash in oil prices due to the price war between Saudi Arabia and Russia.

The company said it expected its deal announced in January to buy U.S. trading platform tastytrade for $1 billion to close in the first quarter of fiscal 2022.

While people have tried their luck in markets over the past year under lockdowns, 2021 witnessed another dramatic surge in retail trading as “mom-and-pop” investors joined together by platforms such as Reddit took on deep-pocketed hedge funds.

They coordinated their buying in stocks that were heavily shorted, fondly calling them “meme stocks”, driving up prices and leading to losses for bigger institutions that had bet the shares would fall.

IG withdrew about 8% of the 12,000 leveraged equity products it used to offer following the “GameStonk” frenzy, named after U.S. video game retailer GameStop which is believed to have been the starting point for the trend. ($1 = 0.7170 pounds) (Reporting by Muvija M, Sagarika Jaisinghani and Indranil Sarkar in Bengaluru; Editing by Uttaresh.V and David Clarke)