Zoopla shares shot up yesterday on the publication of the open letter to estate agents by the Competition and Markets Authority.
The letter warned agents that they must not collude with each other when making portal choices, including which one to drop.
The story went mainstream, with the Telegraph quick to run the story under the headline ‘Fines or prison for conspiring estate agents deliberately cutting off business for Rightmove or Zoopla’.
The letter came out at about 11am.
Zoopla’s shares, which had moved comfortably up during the earlier part of the morning from 270p to about 280p, then started going up sharply, hitting a high of 292.60p before finishing the day at almost 290p.
Rightmove shares also moved up at about 11am, having started the day, 3,870p. They finished yesterday up 9p at 3,879p.
City analyst William Packer had yesterday predicted that Zoopla’s share prices would respond favourably.
Separately, however, Barclays has downgraded Zoopla from ‘overweight’ to ‘equal weight’.
The bank said it still sees an attractive long-term story, but says that the key driver for Zoopla is property.
Barclays said it expects to see only low growth this year in advertising rates paid by agents, “a reminder of the lack of pricing power for a battling no. 2″.
This week, Zoopla announced that it is buying the UK’s biggest supplier of IT to estate agents.
Shares shot up because of that letter. Really ? I doubt it very much. Be interesting to see who bought the shares and then ask them if that was their reason behind doing so.
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Zoopla buys remnants of OTM????? who knows
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