Almost all quoted agencies and portals have suffered as a result of stock market investors being spooked by Coronavirus, with some of the more controversial players - especially Countrywide and Purplebricks - leading the falls.
At close of business yesterday late afternoon, this was the picture:
Countrywide, 175.0p, down 24.05%
Purplebricks, 53.5p, down 15.08%
Savills, 882.0p, down 11.67%
OnTheMarket, 61.03p, down 10.91%
Rightmove, 515.8p, down 7.83%
LSL Property Services, 265.0p, down 7.67%
Foxtons, 59.5p, down 5.71%
The Property Franchise Group, 188.0p, down 3.09%
Winkworth, 135.55p, den 1.42%
Hunters, 55.0p, up 0.92%
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What are the chances Axel Springer will go "all in" on PB and buy up the remaining shares?
And that’s just with a lack of confidence wait until the real effects hit home and PB aren’t getting sign ups - pipelines diminish and prolonged pay offs aren’t expected to bolster long term. It’s not even begun to fall apart yet, this is just the worry.
Michael Riley - Axel Springer have a difficult choice, they bought 135M of shares at 360p in 2018 then bought another bock of shares the following September at a lower value. So with Purplebricks current shares at 53p (down from 107p - at 2nd of March pre-my Daily Telegraph story - 18M of fee kept for not selling properties in 2019) is it wise to go all in?
If Purplebricks implodes and share price hits 40p or less. Twice bitten will Axel Springer go for another bite? Their alternative wait for another party to swoop in?
But who and why, yes it has revenue, but it burns cash like it is going out of fashion. And never returns a profit, and if you list 60,000 properties a year like they did in the UK in 2019, and 21,000 plus come off the market in the same year failing to sell, and you keep that 18M of fee, how long before vendors decide you are just after their money than their custom?
Another big problem, with Covid-19, the self employed LPE's will get no sick pay, and if they can not list as vendors decide not to be vendors due to the crisis - Purplebricks may lose all of their workforce.
No LPE's no Purplebricks.
They could offer means of support to their LPEs....if they've got any money left.
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