5 Feb 2018
Purplebricks is continuing to face calls to release more information about how many houses it sells, following a bruising end to last week which saw its share price slide 15% in just two days.
The company’s share price starts trading at 418.6p this morning after dropping from 489.8p on Wednesday — a fall of 14.5%.
The slide came after the publication of a bombshell report which claimed that the agent sells just over half of the properties it lists, rather than the 78% it has previously laid claim to.
The news made national headlines and at one point was the third most-read story on the BBC News website.
Purplebricks came out fighting, with UK CEO Lee Wainwright declaring the analysis “wrong”.
The controversy sparked a slew of comment on Purplebricks and its business model in the mainstream media.
The Financial Times Lex column said it was time for Purplebricks to start sharing its data about its sales completions.
It said: “House sale figures are recorded in UK government data.
“So why is Purplebricks so coy about its own? In the face of repeated questions over the number of completions the digital estate agent has enabled, it remains tight lipped. It should heed calls to publish the data.
“This is not to satisfy nosy rivals jealous of its ballooning market value, but to protect that value from erosion.
“Purplebricks is in the midst of a £50m expansion into the US. It will struggle to transpose its model if it is debunked.”
The FT article went on to say that there was much to like about Purplebricks but that it was too well established to lean on its Trustpilot reviews (the company announced last year that it would also add Feefo to its site).
It added: “There are two questions the agency should answer. One is the volume and speed of sale completions.
“Next is what it regards as ‘completed obligations’. If it suffices to post a house online without ensuring it sells, customers might think twice about paying a £1,100 fixed fee.”
Investment website the Motley Fool saw a possibility that the recent falls in Purplebricks’ share price was “overly defensive”.
But Paul Summers warned readers: “With so much uncertainty over whose figures are more accurate, I’d be tempted to look for other, less risky, holdings for a growth-focused portfolio at the current time.”
Meanwhile, Sky News presenter Ian King said in his analysis of the row between Codling and the hybrid agent: “Purplebricks will argue that none of those established players publish a figure for the number of homes that they sell, as a proportion of the properties they market, either. But those businesses do not charge customers an upfront fee and so it is not as relevant for them.
“The row is doubly damaging for Purplebricks because it is the latest in a string of rows over the way it does business.”
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