Rightmove avoids more share price woes as court date set
The portal has seen its shares fall 18% in six months despite profit increase forecasts up to 5%.
Rightmove’s shares avoided a hit after news that a date had been set for a court hearing in a £1.5billion legal case against the portal.
The action is being taken on behalf of thousands of estate agents who were allegedly overcharged by the property portal.
And a hearing has been ordered by the Competition Appeal Tribunal for 2nd and 3rd November this year.
News broke
Rightmove saw its share price bounce back by 7% on the day immediately after the news broke of the hearing date last week, despite an initial dip. But this follows a fall of nearly 18% in the past six months.
This share performance comes despite a forecasted profit increase of up to 5% this year.
The price dropped more than 10% on one day in April, before regaining some lost ground. The fall followed the news that legal action had been filed against the portal.
Rightmove’s shares are being weighed down by negative sentiment towards both the company and the broader housing market.”
Dan Coatsworth, Head of Markets at AJ Bell, told The Neg: “Rightmove’s shares are being weighed down by negative sentiment towards both the company and the broader housing market.
“While Rightmove earns its crust from regular fees paid by estate agents, weaker housing transaction numbers can put its client base under financial pressure.
“In that situation, estate agents might push for Rightmove to cut them better deals or they close branches which can hurt subscription income for the property portal.”
Market fears
“Adding to market fears is ongoing uncertainty around whether Rightmove’s investment into AI will pay off, and whether AI chatbots like ChatGPT might become a challenger if aspiring house buyers can get information on properties via AI search rather than going to Rightmove.” An example is Jaiyn.ai, an ‘agentic’ chatbot which agents can run on their sites allowing them to be visible in AI searches.
But he adds: “We’re starting to see certain value-style fund managers show interest in the stock, including City of London Investment Trust which has taken a position in the belief that AI-related fears are overblown.”
Rightmove has been contacted for comment.
