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Investors horse trade Purplebricks shares as Woodford fund woes continue

Toscafund hoovers up more Purplebricks shares sold off by troubled fund manager Neil Woodford.

Nigel Lewis

woodford purplebricks

The implosion of City investment fun manager Neil Woodford’s Equity Fund has prompted highly unusual share trading in Purplebricks stock as both the fund and the hybrid agency endure troubling times.

Yesterday Woodford once more reduced his holdings in Purplebricks, selling five percent of his stock in the company, taking his holding to 23.9%.

The sell-off raised £16 million for the embattled fund, which was frozen by Woodford on Wednesday as he fought to stop investors cashing out.

hughes tosca

Martin Hughes

The shares appear to have been sold to Martin Hughes’ Toscafund, which has been busy hoovering up Purplebricks shares in recent days.

This is likely to be part of speculative move ahead of a takeover bid by another fund, possibly US investment house Francisco Partners, which is likely to offer above bid price for all the company’s shares.

Toscafund initially bought nearly three million extra Purplebricks shares last week making it the eighth largest holder of the company’s stock with a total holding of 5.64%, before then upping its share to 10.1% yesterday.

In the meantime City watchers have been busy shredding Neil Woodford’s reputation.

Evening Standard columnist Simon English yesterday savaged his investment strategy, saying that: “For at least the past five years you didn’t have to try very hard to find fund managers who thought his investment strategy was a sure route to ruin”.

“His plan to mix holdings in large dividend yield stocks with small unquoted biotechs was esoteric to say the least.”

June 7, 2019

One comment

  1. Purplebricks’ share price – surely a business totally reliant on websites such as Rightmove and Zoopla to advertise its products is no more than a larger example of an eBay shop advertising on eBay. I cannot see any value in its shares as it has no true platform of its own to market properties, the local agents are self employed and have been leaving in droves, with no basics, no cars, no holiday pay, no sick pay and no reason to sell a property other than to list so you can get some commission. Can someone please explain the value in a company with no physical assets ie shop or premises, no large contracted workforce and a reliance on Rightmove/Zoopla, to sell its product? It’s just a catchphrase – Purplebricks – enhanced by an enormous amount of spent and ongoing tv advertising; the rest is smoke and mirrors.

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