Purplebricks Share Discussion Threads

[andy] 11/1/2018 13:19

parsons4,

They have plenty of cash currently, I don't think they will be placing anytime soon.

[hpcg] 11/1/2018 12:58

Very difficult to get a rights away since NW hasn't 2 pennies to rub together. I imagine that's why Provident, the AA etc haven't gone down that path to resolve their debt issues.

[parsons4] 11/1/2018 12:54

On this occasion I hope it is a deeply discounted placing as I am short !!!!

[ltcm1] 11/1/2018 11:10

Talking of growth multiples, I think rog has made a terrible mistake here and has confused sales with profits. Rog PURP are valued at 20 times their SALES, they don't actually make a bean dear fellow.

And if that wasn't bad enough there are rumours PURP are burning through cash in Austrailia faster than a Brett Lee delivery.

How long before PURP go 'struth, we need to think about a rights issue.'

[hpcg] 11/1/2018 10:56

ltcm - that is the problem with his current situation. Many of his high yielders are paying out beyond their means. In the dot com mania people sold these companies to buy the fad. This has not happened at all in the current bull market where growth multiples are largely a reward from growing companies, and yes, that includes PURP. Come a recession half his holding will go bust and all of them will go down. Indeed IMO there won't be many hiding places come the next bear market, whenever that is.

[andy] 10/1/2018 15:47

Rog,


NW certainly does have 'clout', due to the size of his funds, regardless of if people like him or not.


He seems to be juggling some stocks between his funds, PURP included, and it does look like he may be in a bit of a corner, IMO.


We'll see over the longer term, but if his funds suffer any more redemptions he may become a forced seller of even his favourite stocks, and that might included PURP.

[rogthepodge] 10/1/2018 14:31

I don't think NW has quite the might of a central bank

the assertions on here become sillier and sillier

the desperation of shorts, I guess

I have done extremely well invested in REDD

another very substantial NW holding

[dangersimpson2] 10/1/2018 14:24

He can't sell purplebricks because the market would smell blood and kill the shareprice. Same with Prothena & Allied Minds - he's ended up as the cheerleader of the companies with large holdings that he can't get rid of. That's why he's used the Income Focus fund to bail out the larger Equity Income Fund by buying some of its holding.

If I held the income focus fund I would now be very worried because due to the necessity of bailing out the other fund he is repeating the mistakes that caused the poor performance and redemptions in the original fund - namely buying unlisted non-dividend paying equities in an income fund.

In my opinion when this finally goes wrong it will go wrong badly. A lot of the unlisted equity valuations were based on the prices that Woodford himself was willing to put additional equity into those companies. Now that he's running out of cash the valuations of these will start to go down which will hit performance and cause further redemptions and a new lack of cash.

If he was clever, instead of using the income focus fund to bail out the others, he should have placed a good chunk of his holding with other holders. He would have had to offer a big discount but would have still made a lot of money on his initial pre-IPO purpose. But he can't do that now or he places an immediate loss on the Income Focus fund that would be unacceptable having just done the transfer.

[ltcm1] 10/1/2018 14:07

'Walk the tape' LOL.

hpcg I accept 'mates' may be an overstatement but what is to stop the grubby deals happening? 'Buy a bit of Purp and I can let you have this etc etc'.

I take your point re forced selling but it could be argued Allied Minds was subject to the same treatment as Purp in that it remained high for a long time and only cracked when a major research note came out. Allied Minds didn't crack because the fund was performing poorly, NW must have given much thought as to how to act in this situation...

I don't know how a short can be 'comfortable' with the volatility Purp has, a quick rise to 500 has quite a high probability IMHO just on the basis of noise. I admire your guts though.

[parsons4] 10/1/2018 13:46

I am sure that NW does not have the clout he did have due to recent performance. I must say though, PURP has become yesterday's story as the property peak has probably passed and more and more business's are conducting or starting up business over the internet. PURP is fighting the whole "estate agency industry" as well as new online offerings. Don't get me wrong I think PURP give a good service but the group will never make net profits to justify any thing like the current valuation all IMHO of course.

[hpcg] 10/1/2018 13:18

ltcm1 - I don't think NW has any fund manager mates; he has been scathing of the industry in general and does not have a lot of fans amongst his peers. He wields considerable firepower himself and can walk the tape between his vehicles when volumes are moderate. What makes this a comfortable short is the performance of those funds, in particular his open ended income and growth. It has performed badly through poor stock choice many with high debt to go with their high dividend. If there is a tide of redemptions he has to sell. He has a choice in what to sell of course, but PURP can't be immune. In theory the patient capital trust could go to the limit allowed in its constitution for a single company (I don't know what it is, but there must be one) but to even raise money, other than taking on more debt, he has to sell other assets where he is the main market.

[ltcm1] 10/1/2018 12:52

The Purplebricks holding is 11% of Woodford's Patient Capital fund so he is hardly lacking motivation to keep the price high. It is a bit like a central bank massaging the currency, unless there is fundamentally driven news they don't have to do any more than hint at intervention in order to support the price.

Who is going to short the stock on a serious basis when they know NW can pick up the phone to his fund manager mates and encourage them to top up their own holdings???

Make no mistake the buffed stock-picking titan is holding all the cards and pulling all the strings on this one. Until some more numbers come out of Purple Towers or the market takes a bath this share is un-shortable.

[andy] 10/1/2018 11:40

Neil Woodford!

[ltcm1] 10/1/2018 11:19

Am I alone in thinking there is a Quindell/Monitise/Blur feeling about this stock???

Purp seems to be a triumph of style over substance, the only surprise to me is Tony Blair isn't on the board!

I would hardly be surprised to come back in three months to find the company called Purple Blockchain.

What is supporting this stock apart from hope???

[elcapital2017] 07/1/2018 20:34

Cant really see them signing a 800 quid loan from close brothers to list with them can you!

[topvest] 06/1/2018 19:31

The risk you have here is two fold:
1. The share price is frothy and any disappointment at all will be met savagely with a 50% plunge in the price.
2. You have Woodford holding 30% and he could end up being a distressed seller.
For what its worth I do not think that a company based in Shirley and with no durable competitive advantage will succeed in the tech epicentre of the U.S. Its just not credible. They will be crushed in my view. So as a UK company is it worth anything like its current market cap. No!

[elcapital2017] 06/1/2018 12:56

youre always drunk numb nuts

[rogthepodge] 06/1/2018 00:04

brilliant rum here too Tony

Cheers!

[tonybaloni] 05/1/2018 15:19

Good luck all, i'm out now, all cash and looking for a new opportunity. Had a brilliant rum here, onwards and upwards.

[parsons4] 05/1/2018 12:04

elc..... I agree with everything you said !!!

[elcapital2017] 05/1/2018 09:27

These morons that say some of us act on every word TW says are stupid. To a great extent, this is a binary decision, buy or sell, so there is always a 50% chance of agreeing with him!

Morons like glends, who have been wiped out several times by his own admission are just plain stupid. What grown up uses that my emojis?

TW gets a lot right, and proved naive punters like rogthepodge completely wrong on stocks like SGH, QPP and globo. It doesnt mean we hang off every word he says, we can pick and choose!