Purplebricks shares fall below the £3 mark – but why?

Purplebricks’ shares had another volatile day on the stock exchange yesterday, dipping below the £3 mark, before picking up again some 8% this morning in early trading.

The reason for yesterday’s fall is unclear.

Some analysts and others we spoke to yesterday could not identify any particular causes, but some speculated that the US launch could be proving trickier than anticipated.

Yesterday, the shares closed at 290p, or nearly 8% down.

Purplebricks, heavily backed from the start by fund manager Neil Woodford, originally launched on the stock market in December 2015 with shares priced at £1.

Last July, the shares peaked at 513p, and at the end of January they were not far off at 490p, giving Purplebricks a market capitalisation of over £1bn.

Today, millions have been wiped off the value of the company, with the market cap now at around £852m.

It launched in the US last September 15, beginning its roll-out in California. It has said it will be going into New York.

Yesterday, according to US portal Zillow, Purplebricks had 187 active listings and 34 Local Real Estate Experts, with some having no listings at all.

However, the US real estate market means that agents can still do well from few deals, simply because commissions are so much higher than in the UK.

In Australia, where Purplebricks launched in August 2016, its CEO Ryan Dinsdale says it achieved 435 sales in the first six months.

 

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38 Comments

  1. 40yearvetran08

    Foxtons tried and failed in the US. It is not going to work, 435 sales in Australia in 6 months, wow wee, might just pay for an advert then what. They should have stuck to the UK until they were making some money, oh I forgot they are not doing that, much easier to flog shares to idiots who think they have found the golden goose. This time next year Rodney!!!

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  2. AgencyInsider

    Lights. Action. It’s time for the next episode of the interminably awful Dom & Ducky show.

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  3. Typhoon

    “The reason is unclear”  No it’s not. It’s really simple. They are not worth it ! They sit on a bed of sand

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  4. Philosopher2467

    Could it be because investors have decided not to continue to behave like the ‘sheep’ they have been and actually study the numbers and also recognise that it’s ‘agency lite’? Anyone who has a modicum of understanding would recognise that PB has no USP and has started increasing its charges therefore closing that gap between its offering and ‘full service’ agents. Investors are also seeing that the media are on to it and any ‘pay upfront’ model is likely to suffer severe consequences when it only delivers a result on 50% (or less) and the punter gets no money back for failure. If it was £99 then you might have a chance but at a ‘grand’; people ain’t gonna wear it for long; imho.

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  5. dantheman78

    Swiss bank ubs have put a sell status on pb shares, they feel they will struggle in a slower market, fools and their money hey

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    1. Woodentop

      Spot on and Jeffries report … the city is getting the jitters with a big fat own goal by PB refusing to confirm how good it is at completing a sale … the public want to know and investors now see through the smoke … there is a big risk of  a collapse and no-one is prepared to listen to spin anymore. Sooner or later PB were going to be found out … is this it?

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  6. Hillofwad71

    California Dreaming.Plenty of room at the Hotel California

    California is the 6th biggest economy in the world !The dismal number of sellside instructions achieved  in 6 months must be disappointing Its less than a  medium sized agent In Bristol They are well off the radar .Tumbleweed.

    https://www.oceanhome.co.uk/

    With a big fat zero Shawna hasn’t got a lot to smile about !

    https://www.zillow.com/profile/user9157578/

    Back in Blighty (according to Zoopla)  it looks as if March will see about 5,500 instructions  which  is showing much slower growth

     

    The current number of LPEs is 743  having hit 745 with staff  turnover still high Glass ceiling appearing on the horizon maybe

     

    To cap it all yesterday one of their   reviews accused them of gross professional misconduct of  hiding offers from vendors The only star  they will be seeing for that is the sherrif !

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  7. Philosopher2467

    It’s a ‘penny’ stock at the end of the day because of the limited amount of ‘divi’ the company can create on a limited profit margin. Half a chance at success for a grand of ‘tax paid’ punters money aren’t good enough odds.

    If there are any good LPE’s at PB and concerned about their future, CWD are looking for some good people and I genuinely believe that would be a better place to be, medium and long term, than PB.

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  8. Chris Wood

    If the company cannot demonstrate that the claims they made to sellers and investors regarding performance and conversions from listings to sales were true/ not selling ‘facilitys’ but selling loans to consumers etc. this story, as has long been predicted by many, will not end here but in the courts.

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  9. Room101

    BREAKING NEWS –

    Purple Bricks shares fall below the £3 mark because, like the PB business model, the shares are not worth paying up front for.

     

     

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  10. cyberduck46

    Zillow doesn’t include all of PB’s Agents. I suspect it doesn’t include all of their active listings or sales.

     

    This list of 47 is closer to the number in California:

     

     

    Bethany Londyn

    Bill Murphy

    Bri Gabay

    Chad Ellsworth

    Colleen Coleman

    Cristin Michele Beavers

    Damon Cohen

    David Schroeder

    Diane Caddy

    Dwayne Washington

    Elsie Arredondo

    Eric Hellon

    Francisco Palacios II

    Gil Dominguez

    Iryna Nuzhna

    Jessica Brown

    John Jennings

    Jonathan Shidler

    JP Dauber

    Kai Murphy

    Kelly Flanagan

    Kevin Klaess

    Kim Cervantes

    Kirk Hawkins

    Lance Greenwood

    Lisa Mann

    Luz Vazquez

    MalibuIryna Nuzhna

    Mark Mazotti

    Martin Mastro

    Mitch Stever

    Nancy Fitzgerald

    Nicholas Miller

    Nick Miller

    Nina Turcic

    Patrick Etheridge

    Peter Owens

    Reyna Garcia

    Richard Harp

    Robert Roberto

    Roger Zelaya

    Roxanne White

    Ryan Rosas

    Shawna Olsen

    Valary Jennings

    Valerie Castle

    Wendy Monnig

     

    That’s today’s corrections dealt with.

     

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    1. dompritch134

      Well done cyberduck is good to have someone fact check on here.

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      1. Room101

        Oh I see, so there are even more PB Agents sharing a tiny portion of income – check.

        How long till PB issue you pair with a cease and desist order; you do them zero favours.

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        1. cyberduck46

           

          Room101, the number of active listings is also wrong. Both the referred to number of LPEs and the number of active listings are wrong.

           

          “Some analysts and others we spoke to yesterday could not identify any particular causes, but some speculated that the US launch could be proving trickier than anticipated.”

           

          I wonder who those analysts are. Usually analysts provide their names and the companies they represent and anything that gets reported on here is usually out there if you search on Google news. Perhaps the comment about the USA came from “others”. Could just be one of the usual gang speculating.

           

          Some clarification over the source of these USA comments would perhaps be helpful. Whether it actually was an analyst or analysts who made them and some idea about how tricky they actually thought it would be in the first place (if as they say it’s proving trickier than they anticipated).

           

           

           

           

           

           

           

           

           

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          1. Room101

             

            The burden of proof is on you when fact checking that there are more LREEs, whilst fact failing to provide the number of actual listings. All you have confirmed is that there is less to go round more.

            dompritch134, the shareholders and I congratulate you on your incomplete and inaccurate fact finding mission.

             

             

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    2. J1

      I hope you bought your shares when they were 70p just after launch boys.

      The company has stalled; it will not take over the property world as it cannot lift its fees high enough to be profitable.

      Woodford won’t support it long term, and when he bails the share price will drop further.

      In the meantime its model is disrupting only to reduce fees not improve service.

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      1. cyberduck46

        J1. 
         
        What do you mean by Woodford bailing?
         
        If he sells his shares there has to be a buyer. He can’t go back to the company and say can I have my money back please 🙂
         
        Oh, and by the way, I’m not a shareholder.

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        1. J1

          If he sells up it will send a shockwave through the stock price
          I do understand how these things work you know!
          Just look at the impact on the US stock market when a celebrity called time on her social media account, $5bn write down on Instagram.
           You are probably too young to remember Gerald Ratner finally admitting his company was rubbish. 

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          1. cyberduck46

            >If he sells up it will send a shockwave through the stock price
             
            Depends on his reason for selling and not if Warren Buffet buys his stake.
             
            If somebody buys the shares they think they’re getting good value. For every seller there’s a buyer.
             
             

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            1. FlyingSheep54

              The only real correction being carried out was the share price.

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          2. Understanding

            Sorry J1, the writedown was on Snap, not Instagram.

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            1. J1

              Appreciatethe correction 🙂

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        2. Room101

          cyberduck46 / dompritch134

          Why are the two biggest fans of PB not shareholders?

          Speaks volumes!

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    3. Property Paddy

      Yeah I read through the list

      I don’t know any of them

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    4. Hillofwad71

      Early days of course but its clear that those employed only have a handful of listings

      Here is another source showing 39  Cant understand why they just dont flag them up on the site

       

      https://www.realtor.com/realestateagents/Agentname-purplebricks

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    5. Woodentop

      Have you ever been to California? 47 is patehric for that state. The majority of agents in the US are part-time second job doing the odd bit for pockey money as its a mutli-listing model. It is rife with fraud and poor service and they are licenced!! Still doens’t alter the fact that shares are going down and sell is now recommended.

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  11. seenitall

     

     

    Paid upfront and still not sold?   Have you been mis-led?  Mis-sold?   

    Let us make a claim for you.  No win No Fee.

    http://www.purbleactionagainst.co.uk

     

     

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    1. Woodentop

      Can I change my TP review to negative?

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      1. PeeBee

        Yup.

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  12. LordElpus56

    I have recently come back from an extended stay in Sydney, and during my entire time there, I saw NO Purple Bricks boards. Not one.

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  13. inthefield

    Answer to the headline….”Because they’ve been found out”

    Its the beginning of the end I think.

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  14. DonShore93

    PB Share Price: will only rise if significant institutional investment is made (on top of Woodford), and that won’t happen as long as PB don’t explain how their numbers are arrived at. I have nothing against PB, but good fund managers don’t punt their fund’s cash on a whim, they need hard facts to back their decision (Woodford doesn’t because he owns his own fund, but the likes of M&G and Fidelity have investment committees examining every decision their fund managers take – and PB won’t pass muster unless they become a lot more transparent).

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    1. Woodentop

      And by now they would like to see some meaningful profit. PB can only show a balancing act of covering its overheads and that is becoming questionable.

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  15. Nick Salmon, M.D. Property Industry Eye

    A message for cyberduck46.

    As we have told you in the past, you are welcome to comment on the posts here on EYE but we will not tolerate you making defamatory comments about our journalism.

    You have done it again at least twice today and those comments have been removed.

    If you do it again you will have your account blocked.

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    1. Property Pundit

      I post on here ‘anonymously’ so that I am freer to express my opinions than I would be posting as the MD of my company (which is involved in the industry). I find it appalling that one poster today – we all know who he is – seems intent upon unmasking a similarly ‘anonymous’ poster (who many of us on here actually know by real name already). I trust this behaviour will be deemed unacceptable and dealt with in an appropriate manner.

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      1. Woodentop

        I couldn’t agree more and I know who you are referring to, as do just about everyone else.  The principle of Anonymously should be respected.

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  16. Hillofwad71

    To be fair  Eye referred directly to zillow .If Bricks have any issues they should take it up with zillow Realtors shows 39 relators employed by Bricks.Surely its incumbent on Bricks as new kid son the block to liase with these sites.Are they just fixated on Trustpilot?
    The problem is if Bricks cry foul and reveal the actual numbers it still won’t make good reading -very few sellside instructions per realtor  .Early days but silence is probably their  best option

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  17. Room101

    Hey Mr cyberfact checking compliance master.  Can you zip across the pond and update your mates on their FAQs.
    Still claiming they are a $1.5bn company and, well, we all know that ain’t true.  
     

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