Purplebricks’ share price value yesterday dropped below the 300p, over 40 per cent less than its high point over the recent summer.
At 9.40 yesterday morning the agency’s price dipped to 297.81p; it hovered just above and just below the 300p mark throughout the day, some 200p off its July high of 513p.
Yesterday’s closing value - down four per cent on the day - is of course still far higher than its original 100p price when it launched under two years ago, but the agency’s share price has been struggling in recent months, and the company’s overall value has lost around half a billion pounds.
The agency has suffered a tsunami of challenges recently with investigations on the BBC consumer programmes Watchdog and You And Yours, complaints to the Advertising Standards Authority - not all of which went against the firm - and a long-running and high profile stand-off in its dispute with reviews website AllAgents.
However, City insiders have told Estate Agent Today that these issues may have had only minimal short-lived effects on the share price.
Instead, they suggest the surge in Purplebricks’ share price at the start of the summer was inflated by publicity surrounding its launch in the US; the company’s inevitably slow impact on the vast US market may have taken the gloss off the company in the eyes of some investors.
Writing in The Motley Fool investor advice column, City analyst Kevin Godbold wrote this week: “Who can resist the lure of a company that aims to disrupt the cosy world of the commission-guzzling estate agency sector? ... The stock market saw the potential, catapulting the shares from around 97p in January 2016 to a little over 500p by August 2017. But there’s a problem. Despite big advances in annual revenue figures, profits remain elusive. Since the summer, it seems to have dawned on many that enthusiasm for the stock has been bubbling ahead of events and the share price has been falling.”
Last week Purplebricks itself issued a brief statement to the City and its investors, saying: "Purplebricks Group plc ('Purplebricks' or 'the Group'), the leading hybrid estate agency, confirms that following the closing of the first half of the financial year, it remains on course to meet the board's expectations for the full year. The Group's Interim Results will be released on December 13."