Purplebricks’ share price drops following ‘class action’ announcement
Company's share price lost just over 9% in value, although the drop is part of a long-term decline in its stock's performance.
The share price has spectacularly dipped following the news that a class action group has been formed to help former self-employed staff claw back pension and holiday payments.
At one point yesterday its share price had dropped by 9.25% on the AIM London stock market from 59p a share to 53p, its lowest price since January when its stock hit 52p .
But this is better than its lowest share price to date, 36p, which the company hit back in May during the property market shut-down ordered by the government.
But overall its share price performance is part of a long-term decline. Launching on AIM in December 2015 at 96p a share, the company eventually hit the giddy heights of nearly £5 a share before beginning its current decline tend in May 2018 at £3.98p a share.
Until recently its share price had begun to stabilise – although it is clear that investors are beginning to tire of its stalled growth plans.
Major player
The company posts impressive sales figures each year and by anyone’s measure is now a major player in the property sales market, but it has not delivered on its promise to ‘disrupt’ the housing market, struggling to win more than 5% of the overall housing market.
Russell Quirk (pictured), who helped organise the launch of the class action last week for the C4J legal firm behind it, says he’s not surprised that the announcement may have ‘moved the Purplebricks share price’ as investors worry over the potential multi-million-pound bill of paying off agents who believe they are owed money.
In response to the announcement, Purplebricks last week said: “In response to the C4J announcement, a Purplebricks spokesperson said: “All Territory Operators entered into a commercial licence agreement and this was clearly set out in their contract with Purplebricks.
“We have always taken legal advice in regards to our licensing model – and the advice is very clear that these individuals were operating as limited companies, running their own business and with full control over their own staff.”
