There seems no end in sight for the share turmoil going on at Purplebricks, with several new developments on Friday before trading closed for the weekend.
Firstly there was another reduction in the stake held in the agency by beleaguered fund manager Neil Woodford - his third sell-off in as many days.
In Friday’s move his stake in the company was reduced from 21.51 per cent to 19.25 per cent; this time last week it was 28.9 per cent. In total Woodford has recovered some £30m from the share sell-off.
Secondly on Friday the London-based Merian Global Investors (UK) Limited - another investment fund, which was already an investor in the hybrid agency - increased its stake from 14.36 per cent to 16.60 per cent.
Thirdly Purplebricks appointed a joint corporate broker to handle its corporate share-based activities: previously it was just Peel Hunt but it has now appointed Citigroup Global Markets Limited (more commonly called just Citi) as joint corporate broker alongside Peel Hunt.
This has been interpreted as suggesting Purplebricks is seeking to appeal to a wider range of investors.
In late trading on Friday Purplebricks’ share price showed a small gain on the day, closing at 108.60p.
That other source of stock market fascination, Countrywide, fell back very slightly to close at 3.65p.
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Axel Springer - that is the interesting factor - they paid for shares a year ago at three times the level they are now able to buy shares at - so on the one hand - a great time to gain control of the business - but on the flip side - having a controlling interest of a business that does not make profit - is that a logical step?
Well done to the Bruce's - Purplebricks has been Goldenbricks for them, and even Mr Woodford is ahead of the game (in terms of getting money out of Purplebricks), though it is questionable that his daytime job - running an investment portfolio of only a limited amount of companies - which has dropped by over 60% in value in recent times - will be scoring points with those investors who invested with him).
Purplebricks if it survives in its present form might limp along hoovering up those vendors who want to play Russian roulette with an upfront model, which pays off 50% of the time, if the property listed is 260k in value or less - but a pure online agency - is not going to be the system of the future for a 'contact sport' like estate agency - the human factor is still an extremely important part of the mix.
Countrywide - less than 4p a share - when it was over 530p a share in the last 5 years, this leviathan is already dead, it may make it to September - but I think a fire sale of any assets will come well before this, together with a mass of closures. A real shame - but out of this will come the new wave of agency - many capable survivors will set up and provide excellent service and be rewarded with financial rewards many times greater than they now earn, as they will follow their own path, utilising the skills they have and the training that corporate agency gave them.
"Well done to the Bruce's - Purplebricks has been Goldenbricks for them. . ."
You have to give those Bruce brothers credit for pulling the wool over employees and investors eyes. As for a business, its a dead horse like Kenny's stable. None of the LPEs saw any proceeds from their CSOP. Only original founding executive team that included David Shepherd, Kevin Kavanagh, Neil Cartwright, Matthew Farrow and of course, Bruce brothers and a few Board members. Irish boys played it well at the expense of all those working for crumbs believing in the future of their stock.
We are surprised Axel Springer made such a poor investment decision in a dying asset. Perhaps, they need to cover up their loss with potential KKR money?
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