Yesterday’s announcement by Purplebricks that German publisher Axel Springer is to invest £125 million in the business has failed to impress the City, dealing in its shares over the past 24 hours suggest.
Purplebricks share price slid by 10% yesterday following the announcement and this has continued today, with its share price dipping to £2.73p at one point this morning.
This is an ongoing trend, though. The company has seen its share price lose a third of its value over the past four weeks and 45% of its value since it peaked in July last year at £5.13.
One reason for the downturn can be laid at the door of the current worries over a looming trade war between the US and the UK, as well as a febrile atmosphere among investors around the world as the EU and Russia sabre rattle.
Directors cash in
But the fact that many of Purplebricks’ senior team including founding brothers Michael and Kenny Bruce have cashed in some of their shares in the Axel Springer deal have also been a source of concern for investors – who don’t like to see directors or key senior people cashing in so early in a company’s development.
Also, as we reported yesterday, Purplebricks warned of lower revenues from the early weeks of the crucial Spring market, blaming the harsh winter conditions, Brexit and a large training programme for its Local Property Experts, which kept many away from their markets.
Investors in Germany appeared to dislike the deal as well. Shares in Axel Springer, which have been climbing on Germany’s main stock exchange for the past year, dropped away today by 1%.
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