The remarkable bull run on the London Stock Exchange continues for hybrid estate agency Purplebricks, which floated shares at 100p just over 14 months ago and has this week seen their value consistently top the 200p mark.
The agency’s share price hovered above, but mostly below, the 200p mark last week but this week has seen a more consistent performance rising above the 200p mark; the share price closed last evening at 210p.
Little over a year ago the company’s share price - then in its first weeks of trading - slipped to a low of 84.5p.
Now it appears to be attracting US investors’ interest for the first time.
A positive review of the company, its business model and its London trading performance has appeared on Seeking Alpha, a US investment strategy website which specialises in covering small and medium-sized capitalisation stocks.
Holmes Osborne, a chartered financial analyst who runs investment firm Osborne Global Investments, writes on Seeking Alpha that traditional British operators such as Countrywide - notwithstanding its own online service - must be “sweating bullets” over the performance of Purplebricks in the agency industry.
Osborne comments that there is little known about Purplebricks in the US, which was why he wrote his article. He concludes: “Is the stock a buy? Maybe. I'm not a tech guy but it reminds me of the stuff from the late nineties. If you could sell my house for a $1,200 commission, sign me up.”
Meanwhile former Countrywide estate agency chief Bob Scarff, now a freelance agency consultant who recently relaunched lead control firm Callwell, has taken a swipe at Purplebricks’ ‘Commisery’ marketing campaign.
In Scarff’s latest blog on Callwell.co.uk he criticises Purplebricks for depicting commission as inherently negative - something he likens to left wing politicians’ criticism of business leaders as so-called “fat cats”.
“I have nothing against agents that operate with ‘no frills’” he writes. “Where I take issue with some of them is this whole ‘we're exactly the same as High Street agents, we're just cheaper’ piece. They're patently not the same because they spend thousands of pounds telling us all that they're not and they can't say they're cheaper because unless or until the house is sold, no one can tell” writes Scarff.
“We must all strive ever harder to deliver what the customer wants. In the final analysis though, what matters most is that we find the best buyer at the best price. You can only be certain of that with performance-related pay. That is what commission is. That is what makes commission essential. Any sensible home owner should choose their agent knowing that” he concludes.