OnTheMarket (OTM) has rejected proposals put forward by a non-shareholder to revamp the business and let him join the senior management team.
Brett Stone, a partner at private investment partnership Edengen, issued an open letter to OTM shareholders this week suggesting that the portal’s board was refusing to consider his suggestions to improve the product being offered.
The letter, which you can read by clicking the link below, suggested that OTM’s board had not to sufficiently invested in the brand, failing to challenge the duopoly of Rightmove and Zoopla as a consequence.
His suggestions provoked plenty of debate on EYE yesterday, with several comments made about OTM and its performance so far.
Stone himself responded to some of the issues raised by EYE readers, insisting that his proposal was not a takeover, but rather a “capital and additional complimentary expertise to deliver what agents have told me they want faster and to more of them”.
He made it clear that he supports Jason Tebb, OTM’s CEO, and the job he is doing.
However, he added that he found it “strange” that the OTM board “would not even want to explore” his proposals that “could benefit OTM”.
He insisted that despite his lack of estate agency experience, he is well positioned to help OTM, as a “classifieds, advertising, information and digital media company”.
Stone added that, as stated in his letter, he would be willing to make a firm commitment to “cap fees in perpetuity”.
He continued: “On majority ownership, agents would own the same number or more shares [45 million] under my proposal and collectively retain around 25-30% allowing them to prevent anyone taking OTM private.
“If agents start selling next month when their lock-ins expire, the collective agent shareholding will fall. Plus, the board issued options last year to Jason and others equivalent to 3.2% of the company. Meaning in a couple of years, it is likely OTM will not be majority owned by agents anyway.”
A spokesperson for OTM told EYE that the board was not interested in the proposals put forward by Stone.
The Spokesperson said: “The board of OnTheMarket received a letter from Brett Stone in late 2022 and after careful consideration, unanimously agreed his proposal was detrimental to stakeholders. Mr Stone is not a shareholder in OnTheMarket, did not provide any evidence of shareholder support for his proposal or any details of any available funding.
“The board consider that OnTheMarket has strong prospects as an independent business, as evidenced by our recent trading update which showed record revenues and profitability, alongside on-going strategic progress.
“The board also place great value on OnTheMarket’s majority agent owned shareholder structure and believe that this continues to benefit all of the Company’s stakeholders and the property market as a whole.”
Potential investor pens open letter to OnTheMarket stakeholders proposing change
If I had a wad of cash burning a hole in my pocket portals would be the very last place I’d be looking at if I was interested in filling my other pockets and a large suitcase too. Investment is desperately needed in the next generation of CRM systems.
I was a bit taken back by the Reapit news, but what it shows is the need for some serious money and domain knowledge in enterprise level systems.
Material information IS the catalyst for change in the industry and although Corelogic have quietly become ‘Switzerland’ ( neutral in the middle of all that’s going on around them) there are good opportunities servicing both agency and conveyancing, That’s where the next opportunity lays
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Agents and shareholders can now decide if they think what I was offering is “detrimental to stakeholders”:
1. cap member listing fees at a fair level in perpetuity;
2. retain and improve members’ influence;
3. increase spending on marketing and agent onboarding;
4. invest in new products and services that benefit members and members’ customers;
5. hire additional talent with digital product and marketplace expertise;
6. keep OTM listed for all shareholders to be able to buy and sell shares at will;
7. keep OTM listed for all shareholders to benefit from future value created;
8. provide an opportunity for members and shareholders to invest more capital if they choose;
9. buy back shares from shareholders who require liquidity; and
10. raise all employees’ wages by 10%;
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11. Explore original idea of OTM being a replacement to RM by mass exodus. (Using No.1 as a ****** good reason)
12. Have a clear plan on how you can convince EAs to (In mass) remove stock from RM as if you can swing UK housing stock to show the majority on OTM and not RM, then within 3 to 6 months “house hunter” habit will change to typing in “www.otm” or clicking on the otm app first, as they will follow the place where the most stock can be viewed first.
Brett, without 11 and 12, you will burn millions of pounds on getting nowhere.
Because if OTM is to concede their place as No.3 or No.2 is fine, it is nothing more than an additional expense which will be the first to get dropped when EA’s tighten their belts. IMO
Gosh, brave twice in two days, to pass opinion against OTM.
and HEY, I want it to work…. as an original gold member shareholder, I would spend hours defending it on here and other forums, but seriously… what does it want to be.
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Brett, if you feel so passionate about this vision and opportunity, why aren’t you going the traditional route with plc of acquiring enough shares to have an actual say in proceedings?Your plans generally involve a lot of spending proposals, all of which need quantifying and to be paid for. This looks like a pretty standard approach of growing a business aggressively whilst simultaneously accruing a lot of debt, which typically leads to an early exit by the instigators of such a strategy, realising an increased share price through greater revenue (NOT profit) – but leaving the business facing an, often, insurmountable debt burden.
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“record revenues and profitability” if total agents using OTM and share of consumer traffic are declining (which they have been over the last 18 months of reported numbers), does not benefit shareholders, members or members’ customers.
The current plan under Bell’s leadership of the board is killing OTM and is a fast-track to failure.
It only benefits Tebb and Bell in the short-term and Rightmove in the long-term.
Bell was previously chief executive officer of Ladbrokes from February 2006 to May 2010.
The Guardian reported that Bell’s resignation was the result of institutional shareholders requiring change due to disappointing performance.
After Bell left, the new chairman (Peter Erskine) said Ladbrokes had:
“fallen behind the competition in areas such as technology and digital marketing”, and
the new chief executive officer (Richard Glynn) found a:
“lack of strategic direction, underinvestment and a siloed approach to doing business that was holding the Company back”.
The same is happening at OTM in my opinion.
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If you’re not a shareholder, you don’t know the details of the OTM business plan. How do you know what OTM are going to be doing in the future? You don’t.
Your assuming the business wants your help but you dont know anything about the agency sector or the tech sector. Its not about classified advertisign and if thats what you think it is that just shows you dont understand the business model.
Hands off our portal!
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tbf ScottL
I am a shareholder and never yet been asked to vote on something, despite the original promise of every shareholder will get to vote on things.
Well actually, I was asked (told) to vote yes on the IPO or face losing my investment, but that was about the last vote.
I’m not convinced most smaller agents have any idea what the OTM business plan is either. Or certainly no idea what the “end vision” is…
AM-V1 which was flawed from the start (it now turns out), had a powerful message and if that message is no longer the mission, I cannot see OTM as a portal anymore. Similar to Zoopla, jack of all trades and a master of none.
This is perhaps where some of the original Gold Member agents have simply fallen out of love with the OTM brand. The first version was a full on attack with a pretty clear and solid message.
AM-V1 might have worked if they had allowed ALL agents on and even let them all on for FREE to get stock at 80% plus… then the AM Gold Members could have removed their stock from RM and created the potential of OTM having more stock than RM and certainly Z within a month or so and thus showing other agents dropping RM is now ok.
Ship sailed, springs to mind, as did Mr Legged-it, when he realised, EAs will never agree and no chance will we ever achieve the ultimate aim.
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Brett, If you have a few quid and want a deal, why not buy Purplebricks? OTM know what they are doing, Purplebricks don’t so may actually appreciate your assistance.
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Something is off about this whole thing. Seems political or motivated by something else.
Brett – prove me wrong.
Are you acting alone? Do you have an association with any of OTM’s competitors or any other business in our industry?
Why did you decide on OTM despite having no background in agency or proptech?
How do you know what their business plan is?
If you’re genuine and have good ideas that’s fair enough, but I’m baffled why you want to play this all out on articles like this, seems ameturish and not at all sophisticated.
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I can figure most things out- I don’t understand what’s being attempted here or the strategy.
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We don’t want a greedy American private firm swooping in “for our best interest”. Bedroom/keyboard warrior, I’ve looked online and can’t find a thing about this guy. Clearly has no idea about prop or tech, wouldn’t want you near OTM without credentials being presented.
We don’t want you Brett, hands off our portal!
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It is always interesting, and flattering even, when someone thinks they can see extra value in a business. But the detail of the offering of lightweight. Reminds me of Boris Brexit campaign…some of us have confidence in the current management. Leave it be.
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If things are that bad why is Mr Stone interested???
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