The Real Deal National

Is Purplebricks being sold? A German company just bought millions of shares for a few dollars

Media company Axel Springer doubled its stake in the flailing brokerage to 26%
June 05, 2019 11:30AM

Axel Springer CEO Mathias Döpfner and Purplebricks CEO Michael Bruce (Credit: Pixabay and Getty Images)

Axel Springer CEO Mathias Döpfner and Purplebricks CEO Michael Bruce (Credit: Pixabay and Getty Images)

Purplebricks, the flailing U.K.-based brokerage that has pulled out of Australia and is reviewing its U.S. operations, may have just received a lifeline.

Axel Springer, the German media company behind Business Insider, said Monday that it would buy 43.7 million shares, doubling its stake in the company to 26 percent, according to Inman.

In announcing the investment, which it paid a few dollars to executives for, Alex Springer said Purplebricks is a “the hybrid real estate agent model” that “offers great potential.” It had previously invested $177 million in the brokerage.

Since launching in 2014, Purplebricks shook up the brokerage world by charging homesellers a flat-fee of around $3,200 to list their properties.

But in the past year, the flat-fee brokerage’s stock price dropped 65 percent and multiple executives have left the company. Purplebricks slashed its forecasted revenue for 2019 from $242 million to between $170 million to $183 million.

Last month, the brokerage announced that it would close its Australia operation and is reviewing its entire U.S. business, where it operates in seven states. [Inman] — David Jeans