Purplebricks’ share price hit a record high in yesterday’s trading after an activist investor increased its stake and called on the online agent’s chairman to resign.
Adam Smith has increased his stake in Purplebricks to 5%, the point at which he could call a general meeting on pressing matters affecting the business.
A stock market update yesterday showed Smith and his investment vehicle Lecram Holdings increased their stake to 4.18%.
Smith has also written to Purplebricks chairman Paul Pindar urging him to step down amid the company’s falling share price and cash burn, saying action is needed to “restore the credibility of the company with investors”.
The letter called for Pindar to be replaced with someone with “the experience and skills to urgently address the company’s continued cash burn and operational performance with a tight residential real estate agency business.”
Purplebricks’ share price has fallen 85% since its IPO in 2015.
The share price fell to a low of 13.82p in yesterday’s session but closed at 15.06p, up 1.76% from Friday.
It comes as the online agency brand issued a business update in May in which it warned losses could reach nearly £9million.
Purplebricks said it has seen a continued decline in volumes of new instructions coming to market since announcing its interim results in January.
The company’s accounts have already been deferred to the first week of August so that its auditor can assess new controls introduced after compliance issues in its rental operations were revealed.
A Purplebricks spokesperson said The temperature“We sought to meet with Lecram Holdings to discuss their concerns. They refused.
“It’s disappointing that they chose to speak to the media rather than engage with us.”
New chief executive Helena Marston, who announced fee increases last week, is expected to reveal further strategic changes once Purplebricks’ annual results are released in August.