US Activist Investor Takes 6% Rightmove Stake

US investment firm Sachem Head has reportedly acquired a 6% stake in Rightmove, valued at several hundred million pounds.

Sachem Head Capital Management is an SEC-registered investment manager founded in 2012, primarily focused on equity investments in North America and Europe.

The Sunday Times reported that investors familiar with the deal said Sachem Head believes Rightmove, trading nearly 40% below where it was a year ago, is fundamentally undervalued because markets reacted negatively to its shift toward building proprietary AI solutions.

Rightmove's share price hit a low of £4.10 a share in May, and is currently trading at £4.50 a share at the time of writing.

While Rightmove may be grateful for belief in its stock, the potential downside is that Sachem Head has a reputation for being an activist investor—a short-termist that lobbies for change across the boardroom, operations and other changes that accelerate shareholder value.

It is an uncertain time for Rightmove. According to the Times, Sachem Head believes rumours of an AI-prompted share sell-off of Rightmove stock are being exaggerated—while other investors are speculating that Rightmove is positioned for a takeover, two years after REA Group attempted an ambitious buyout. The portal operator fell out of the FTSE 100 in June after share prices fell 40% in the previous 12 months.

Meanwhile, Rightmove has also completed several share buybacks from Peel Hunt LLP, purchasing around eight million ordinary shares in the past four weeks.

Rightmove is set to go to court in November in a £1.5 billion collective action alleging abuse of monopoly.