Rumors of a joint portal launched by Purplebricks and corporate agents

Estate agency Purplebricks just experienced a drop in share prices which seem to be influencing a similar stock event for Countrywide. This suggests that Purplebricks' founders should do what's right and step down.

But perhaps they are looking at another option entirely: ‘Rightmove 2’?

When Countrywide’s shares slid from an all-time high of 686.4p to just 100p, its CEO Alison Platt was forced out on the back of her disastrous ‘retail’ strategy, albeit that her tenure began when shares were at 408p.

As you read this article, Countrywide’s shares have tumbled even further and are now just 11p (and even sunk as low as 8.5p in December), with the company clinging on by its fingernails and hoping its new ‘back to basics’ approach will do the trick.

Surely Purplebricks’ shareholders must be concerned they are heading in the same direction with shares tumbling from an all-time high of 525p in the summer of 2017 to about 140p at the weekend, and 99.8p at their lowest on the day of their profits warning.

As we’ve seen from Countrywide’s example, could they plunge even further? Can this model ever be profitable?

What must the group’s biggest shareholder, Neil Woodford, be thinking as he watched £36m wiped off his 27% stake overnight when Purplebricks announced its recent profit warning, along with the exit of its US and UK CEOs?

It’s even worse for German media giant Axel Springer, which has seen its investment cut in half in just one year.

It has lost a massive £68m by my calculations, having invested £125m in Purplebricks, buying 27.7m shares at £3.60 each totalling £100m last March and a further 3m shares at a cost of £3.07 totalling £9.2m in July, taking its stake to 12.5%.

To cut its losses it might be time for Axel to forge ahead with opening its proposed joint venture portal in the UK on the back of its German Immowelt.de portal, which is the German equivalent to Rightmove.

It would need Countrywide and LSL to make the numbers up, plus probably the under-invested-in Connells/Sequence group.

It’s allegedly being billed as Rightmove 2.

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