Purplebricks’ share price sank to its lowest level for 21 months yesterday after bottoming out during the late afternoon at £1.95p a share before rallying a few pence.

The relentless reduction in the company’s share price value since June when it peaked at £4 has been blamed by City analysts and share tipping services on investor excitement about the company’s prospects after it launched on AIM in early 2016. A year following the stock market debut, its share price rose to its all-time high of £5.13p.

According to leading advice service the Motley Fool, ‘common sense’ has set in and Purplebricks’ share price is now finding its ‘rational long-term valuation’.

Also, yesterday’s share price drop has been attributed to weak trading volumes in its stock.

Profit search

The Motley Fool also says investors are now wondering where profits will come from in the long term and that its international expansion is ‘too far, too fast’ and that profitability in the overall business is still some way off.

As The Negotiator has reported in the past, investors are also troubled by problems within its Australian operation where a tough property market and problems with LPE recruitment and retention have led to negative publicity about its business model.

But several City advisors also see the plummeting share price as an opportunity and both Peel Hunt, Liberum Capital and Citigroup have said investors should buy its shares.