Investors offload millions of Purplebricks shares as City speculation grows

Investors have been offloading nearly 20 million shares in Purplebricks over the past 48 hours, suggesting two potential scenarios for the agency.

These are that City confidence in the hybrid agency has reached a turning point and few believe it can be the City shares giant it once was, or that trading positions are being taken ahead of a takeover or acquisition.

On Monday some two million shares in the company were traded, leading to a stock value dip that at one point valued it at just £40 million, a new low compared to its £1.2 billion valuation five years ago.

One of the largest movements this week has been via Jupiter Fund Management, which has been reducing its exposure slowly in recent months but has now sold its remaining stock in Purplebricks.

The fund held the shares after inheriting a 17.5% stake in Purplebricks after taking over competitor fund Merian Global Investors in July 2020 at which time the share price was nearer 50p.

Consequently, its losses aren’t that huge compared to other investors who bought at much higher share prices.

Acquisition?

One regular Purplebricks watcher within the industry has told The Negotiator that the agency’s rock-bottom share price makes it vulnerable to a takeover and that a deal with one of the industry’s cash-rich agencies on the acquisitional trail – such as Lomond Group or Dexters – could be on the cards.

This could see Axel offload some or all of its 81.4 million shares in Purplebricks in return for the management expertise and stability of being within a traditional estate agency group.

This would be the ultimate irony – the great disruptor of High Street agency being eaten up by the very structure it hoped to topple with its off-the-high-street model and fixed-price charging structure.