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Another bruising day for Purplebricks as market reacts to BBC radio investigation

KREMER NS

Purplebricks’ share price endured another bruising day after the markets were given their first chance to react to the Radio 5Live investigation in which the firm’s UK CEO Lee Wainwright appeared.

Shares dropped 7.2% (30.2p), having fallen nearly 15% on Thursday and Friday last week.

The firm’s share price closed yesterday at 388.4p.

The fall appeared to be a reaction to the radio programme on Sunday which investigated online estate agents, and in which Purplebricks admitted that its figure of 78% of homes it lists are sold is based on sales agreed – those sold subject to contract – and not on sales completed.

Lee Wainwright, UK boss of Purplebricks, appeared on the 5Live Investigates show with Adrian Goldberg in a bid to defend the company against bombshell claims by analyst Anthony Codling of Jefferies.

Wainwright said the Jefferies’ allegation that Purplebricks sells only 51% of listings was “a very big claim – and it is not true”.

However, his appearance did not appear to convince investors.

Meanwhile, Purplebricks received more criticism from analysts – this time from Chris Beauchamp, chief market analyst at IG, who questioned whether or not Purplebricks’ decision to go on the offensive was the best strategy.

In a note to investors, he said: “Purplebricks’ defence of its model after Jefferies sell-note may make the management feel better, but the image that is created does the company no favours. Better to suffer in silence and let the performance speak for itself.”

Purplebricks was the biggest faller among listed agents and portals yesterday, followed by Countrywide, which dropped just over 3% to 90p.

ZPG was down 2% to 333.4p, and LSL was down nearly 1.8% to 278p.

Other fallers included TPFG (down 0.7%), Rightmove (down 0.8%), Savills (down 1.3%), and Foxtons (down 0.1%).

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Source:: Another bruising day for Purplebricks as market reacts to BBC radio investigation