A major backer of Purplebricks has doubled its stake in the online estate agency, as the group battles to shore up investor confidence following the departure of its chief executive last month.
Global media group Axel Springer upped its stake in the group from 12.4 per cent to 26.6 per cent today, doubling down on the group weeks after it ousted its boss and announced plans to pull back on its international expansion.
Axel Springer, which paid £1 per share for the new stake, originally paid £3.60 per share for an 11.5 per cent holding in the company in March last year.
However, the value of in Purplebricks shares have crashed more than 70 per cent in the last 12 months, falling from 376p in May last year to roughly 104p today.
Axel Springer’s original investment was partly aimed at driving the company’s overseas expansion efforts, but last month Purplebricks said it would scale back its US footprint and leave the Australian market after the group said it chased international growth too rapidly.
Non-executive chairman Paul Pindar said: “With hindsight, our rate of geographic expansion was too rapid and as a result the quality of execution has suffered. We have also made sub-optimal decisions in allocating capital. We will learn from these errors and will not make them again.”
Founder Michael Bruce stepped down from his role at the firm following the news.
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The company’s share price had risen 0.5 per cent in early afternoon trading today.