Purplebricks (LON: PURP) share price has been reduced to a fraction of a penny after the company got sold to its rival Strike. The deal, which was announced on Wednesday, included a sale of the assets and business of Purplebricks plc to Strike for only £1.
The announcement triggered a waterfall in the Purplebricks shares as the shareholders rushed to cash out. Consequently, the stock closed the day with a 43.83% loss. This also marked the first daily closure below the major psychological level of 1 penny.
Strike Buys Purplebricks For £1
This week’s major development was the deal between the Purplebricks and its rival Strike which is backed by Charles Dunstone. As per the details, the current boss of Purplebricks will have to step down, and there could be hundreds of job losses. This has left the redundancy sword hanging on the heads of the 750 employees of the British online real estate again. As a result, Purplebricks share price has dropped to its lowest level in history.
Purplebricks put itself on sale in February 2023. According to the management, the company couldn’t secure a better offer than the Strike deal. As per them, all the offers received included a reduction or change in the company’s workforce.
Purplebricks Share Price Bounces After Record Drop
On Thursday, LON: PURP opened higher, but the selling pressure turned the candle red once again. At the time of press, the shares are still trading 3% above yesterday’s close. However, this bounce is peanuts considering the monthly drop of 88.6%.
At its peak, Purplebricks plc was valued north of 1 billion pounds. The recent drop has reduced its market capitalization to only 2 million pounds. For me, the Purplebricks share price forecast will remain bearish as long as the stock trades below the trendline shown on the following chart. This means the price has to increase by 750% from the current level. A sane approach will be to stay away from such a risky investment.
I’ll keep sharing my updated price outlook on Purplebricks & other stocks in my free Telegram group, which you’re welcome to join.