OnTheMarket slammed over ‘poor performance’ by City activist
On the day of its AGM, Brett Stone has claimed in an open letter that the portal continues to miss its key objective of rebalancing power towards agents in the 'portal wars'.
Investment activist Brett Stone has issued another ‘open letter’ to shareholders of OnTheMarket’s within which he heavily criticises the portal’s performance, corporate governance issues, and failure to prevent Rightmove’s excessive price increases.
The comments have been mada ahead of today’s AGM for the company.
Stone is a British entrepreneur who has a background in finance, but now runs a London-based firm called Edengen. He issued a similar letter in January this year in which he said OTM has failed to deliver on its founding mission to rebalance the power between agents and Rightmove and Zoopla.
Brett also says he has tried to provide the OTM board with the “additional expertise and capital needed to deliver attractive returns for shareholders and simple compelling products for customers at speed and scale”.
Key points within the letter:
- OnTheMarket are underinvesting in their products, teams and business handing an easy win to Rightmove and resulting in the loss of estate agent customers, fewer listings, less visits to their site, slowing revenue growth and a declining share price.
- Since OnTheMarket listed in February 2018, shareholders have seen the value of their investment decline by two-thirds, customers have seen their aggregate property portal costs more than double, and the property commerce category in the United Kingdom has remained slow, inefficient and stressful for estate agents and consumers.
- The portal is losing customers with 1,084 estate agent branches lost last year and more than expected being lost so far this year. He also points out that OTM portal visits are down 14% and revenue growth slowed in the second half to up £0.4 million or 2.4%.
He also claims that OTM is “irresponsibly diluting shareholders and granting options to insiders”. OnTheMarket issued 19.5 million new shares since IPO and has granted 13.2 million options.
Brett also makes the wider claim that OTM “does not appear to be acting in the best interests of customers, shareholders, or consumers”.
Read his open letter in full here.
The Neg has approached OTM but its spokesperson has declined to comment.
The Cantor Fitzgerald approach – which is probably at the heart of Brett’s bright idea is not for everyone, and the personae of the UK property professional is radically different to those across the pond. Throwing lots of ‘cash’ to build a better thing, is in the present times proving to be a really dumb way of growing operations, better to focus as the present CEO is on capturing the hearts and minds of the stakeholder agents.
“Winning the hearts and minds ” agents is precisely what OTM is failing to achieve. There is no compelling message, no crystal-clear vision and just like Russel Quirk and his ill-feted online experiment with other people’s money, it is default dead.
People are persuaded emotionally not by logic.
If OTM had set out charging all agents a flat £250 plus VAT per office regardless of number of properties……….had no frill add ons etc…….I guarantee 90% of agents would have listed, it would have been the correct check on RM.
But no they listed, became greedy and the whole thing has been a flop.
Mr Johnson, I think our understanding of “flop” is different. We advertise on OTM, RM and Z and can tell you that we get more enquiries from OTM. Rightmove is 2nd and Z is 3rd.