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Graham Awards


Purplebricks share price plunges as speculation mounts over investment

Purplebricks’ share price yesterday plunged to 90.5p at one point - well below the 100p level at which the company originally floated.

Although the price recovered in late trading the volatility followed renewed speculation about possible new investors and uncertainty over the agency’s US operation.

As recently as May 2 - just three weeks ago - the share price was 137.2p but since that time the company has lost founder Michael Bruce, closed its Australian operation and just this week revealed that its US activities were under review.


Some 22 months ago Purplebricks’ shares closed one day of trading in July 2017 at a remarkable 498.5p - valuing the firm at five times its worth today.

This week is rather different with the latest analysis of UK market share conducted by the consultancy The Advisory revealing that the top 10 online agents have only 4.4 per cent market share. 

Within that 10, Purplebricks is the clear leader but even here its dominance has dipped slightly in recent weeks.

The share price drop is despite new investment in the agency from Toscafund Management, a hedge fund that has backed the online agency sector in the past, including HouseSimple and EasyProperty.

Toscafund acquired nearly three million extra Purplebricks shares last week; it now owns 5.64 per cent of the firm.

This morning the trade publication The Negotiator is speculating that US private equity fund Francisco Partners specialises may be about to invest. It has $12 billion of funds under management.

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    As I speculated the other day, there is only one trajectory for Purplebricks and that is down. They were found out by the industry years ago and now that word has spread the public are well aware of their one dimensional approach to estate agency. They will never make a profit. We have friends in Australia that find the whole Purplebricks debacle laughable, it is common for the word Purplebricks to be used by Australians for anything thing that is a shambles or goes wrong! “It’s all gone Purplebricks”.

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    Oh I love a bit of good news first thing in the morning. How commiserable for them at PB :)

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    how stupid are these investors, they must be pretty savvy to be where they are, but i cant understand how you can make money from no profits and no shareholder dividend?

  • Reconfigure My Home

    The hybrid online Ponzi scheme is dying...

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    We are amazed on how a fund of that size would even consider such a poor investment with their limited partners money. Purplebricks is a dog that will shut down USA operations too. The model is broken with leadership and LPEs already exited over the past few months in all markets. Bruce brothers already made their fortune thanks to Axel Springer and the Board responded to slow to push the Bruce's out of the business. They created significant damage over the past year with poor marketing and business model decisions. They influenced all local operations and will be surprised if their actions are their share dealings are not reviewed. They must be hiding their money now to protect it. Talent in the UK has already resigned with even more turnover happening daily. LPEs territories are open due to people exiting. Money is not the answer. Good luck and fun to watch!


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