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Investors worry as Purplebricks’ share price continues to nose-dive

Industry watcher says shareholders are worried that the agency is increasingly looking just like the industry it once professed to disrupt.

Nigel Lewis

Proptech purplebricks sign gold image

Investors are becoming increasingly perplexed by Purplebricks as its share price continues to plummet on an almost daily basis, a leading expert has said.

Since the beginning of June the estate agency’s share price has dropped from 90p a share to 61p at close of trading yesterday.

The decline has accelerated in recent days since it revealed plans to bring all its field operatives in-house as staff, declining by 71p a share to 61p a share, a 13% drop.

Purplebricks’ stock has performed poorly during Covid while many estate agency share prices have increased as the market has boomed, declining overall by 40% in value.

Link to Stamp Duty feature“I think the challenges for Purplebricks are two-fold,” says industry watcher and Twindig founder Anthony Codling (pictured).

“Paying a low fixed fee seems like a good idea in a hot market.  If homes are selling like hotcakes, why pay more?

“But it appears that Purplebricks has not been able to gain market share during the stamp duty holiday fuelled housing market.”

“Perhaps Purplebricks is a bit like Goldilocks, it doesn’t work if the market is too hot and it doesn’t work if the market is too cold and the perfect temperature range appears quite narrow.”

Codling also says investors are clearly concerned that its recent decision to change direction and bring its field staff in-house as employees is a ‘significant change in direction’.

“Investors may also feel that the company that they invested in to disrupt the housing market has actually been disrupted but the housing market,” he says.

“The challenge for Purplebricks will now be to soothe the fears of its LPEs, and to show investors that it can once again look like a disruptor, walk like a disruptor and talk like a disruptor.”

August 17, 2021

3 comments

  1. Pretending to be a national agent, think the Connells Group and their £80M profit takes a huge sales force, say 1,300 branches, and insight and strategy. Purplebricks sales force is tiny, dispirited, and likely to be consigned to the history books.

    The share price tells all, the barometer of fortune says the game is over. When it listed on the Alternative Investment Market in December 2015 its share price was 95.5p, it rose to 498.5p in July 2017, and now it is 61p. After nine years of trading and the ‘best’ housing market in memory, where an online model should thrive in lockdown conditions, it managed only a 3.6M pre-tax profit.

    Having burnt through hundreds of millions in investment and cashflow. Its new HMRC forced pivot to an employer model, (its Uber moment) plus its bright idea of returning cash to those who do not sell is going to eat through that cash at bank very quickly.

  2. A fixed fee isn’t sustainable if the service hours are variable. Added to which the marketing message is non- existent. Default dead strategy.

  3. Pretending to be a national agent, think the Connells Group and their £80M profit takes a huge sales force, say 1,300 branches, and insight and strategy. Purplebricks sales force is tiny, dispirited, and likely to be consigned to the history books.

    The share price tells all, the barometer of fortune says the game is over. When it listed on the Alternative Investment Market in December 2015 its share price was 95.5p, it rose to 498.5p in July 2017, and now it is 61p. After nine years of trading and the ‘best’ housing market in memory, where an online model should thrive in lockdown conditions, it managed only a 3.6M pre-tax profit.

    Having burnt through hundreds of millions in investment and cashflow. Its new HMRC forced pivot to an employer model, (its Uber moment) plus its bright idea of returning cash to those who do not sell is going to eat through that cash at bank very quickly.

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