With a variety of accusations railed against them, Purplebricks continues to stand firm that they are successful and are bringing in money at a good rate. However, after BBC radio launched an investigation into the company, it's hard to think the company is as healthy as it says it is.
After the radio program, which featured an appearance by the company's CEO Lee Wainwright, shares of Purplebricks' stock has dropped 7.2%. In the program, Purplebricks admitted that their claim of selling 78% of their properties came from not just actual sales, but incomplete or on-contract sales.
Jeffries, an analysis firm, recently claimed Purplebricks had only sold 51% of their listings. On the show, Wainwright claimed that what Jeffries said was “a very big claim – and it is not true”.
Purplebricks dropped the most in stocks that day in the industry, with the closest second, Countrywide, only dropping 3%.
Chris Beauchamp, chief market analyst at IG, had some critique for how Purplebricks handled the attacks. “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.”
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