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Hi Cyberduck,
I just had a look at The Bild :D :D :D. What a wonderful publication, the topless girls look amazing.
Rupert Murdoch had topless girls on page 3 of some British Tabloid and made a fortune out of it, didn't he?!?!
Rupert Murdoch also purchased MySpace when it was bigger than Facebook, and then sold it to Justin Timberlake for pennies on the dollar and it's not worth anything anymore.
Hi Cyberduck,
So if it did make a profit in poor through to great market's wouldn't the value go up exponentially?
The one that cracks this formula will be the real UBER et al.
Hi Sain,
Ok well someone needs to give Dr Andreas a ring and tell him to parachute into PB and open fire er fix it.
Otherwise, staying away or shorting this stock will be the best bet.
Hi Sain,
In regards to the ABC news link you posted, I feel that just because the market is at a particular part of its cycle, it shouldn't matter, for the right business model.
The right model will weather all seasons and cycles to become a great business with a valuation to match.
Hi Sain,
I think the true UBER of Real Estate is yet to emerge, and from the lessons learned from PB's and the copycat's mistakes due to the hubris and greed of the founders and investors, will really become something special.
You might not call it luck that Axel needs, but what would it be called to literally wipe the slate clean from all the rot and start fresh with the right approach?
Hi davebp,
Somebody rather shrewd must have seen your relations coming! They also must have not even gotten a second opinion or quote, and be very naive.
Agent's fees in Australia mostly vary from 1% - 3%. Many charge a flat fee. Here's a guy that the local PB agent loses out to every time she's up against him:
https://www.realestate.com.au/agency/craig-currie-pakenham-VYAGES
https://www.craigcurrie.com.au/
Craig charges $4950 if he gets a sale, and the seller just pays marketing upfront at cost. Most areas have very competitive agents more than willing to undercut PB.
Someone paying 10% in Agent's commission is the most ludicrous thing I've heard this week. :D
I truly believe PB got lucky in the UK, and their wild, wild west style has come to the foray in Australia and failed.
Call it negativity if you like. I call it a reality check. I also call it insight into the current operation across the board from the beginning until today and for as long as nobody says "Enough!".
Good luck Axel, you're going to need it.
Hi Cyberduck,
I can only tell you about what's happening in OZ.
The first year wasn't fine, but they did enjoy a honeymoon period until the problems emerged publicly.
If PB are the Uber/Airbnb they want to be, they'd be worth £10B + by now.
If you're buying and selling for small gains here and there, you can ride the waves for a while, as long as you're careful not to be holding too many shares at any given time.
Hi Sain,
In answer to:
Good posts. However aren't these effectively teething problems and the management of change? .Bringing in some property heavyweights will go a long way to changing the culture, Not easy, I agree, but Axel will demand it?
The business model is so so so far away from becoming a real "UBER" or "AIRBNB" that right now the share price being above 0.0001 is in the vain hope of the miracle that it is going to be the next Airbnb or Uber.
If you look at the behaviour of management, you can see there's no chance.
Buy this stock at your peril!
Axel should get out and start something from scratch with the right business model. They'll have Airbnb or Uber international success within 12 months.
Risky. Shorting the stock, however, is a good option.
Hi Cyberduck,
In answer to:
In Oz there seems to be no growth in instructions whereas in the UK there is. In the early days in the UK they were growing really quickly. The yearly number of listing rising from 4330 to 19200 to 41000 as the number of LPEs grew rapidly.
Although the signs in Oz were reportedly encouraging at the start this same growth hasn't happened.
You say this isn't market conditions. Why do you think this is?
In OZ, the customers and the agents are a very different dynamic compared to the UK. Likewise in the USA being different to both the UK and OZ, but the USA is yet to hit the brick wall like OZ has.
Management treats all the LPE's like the enemy, and they think by using threats and other bullying tactics, that agent's will be happy to be beaten into submission. Not the case.
When they started, all of their contracts have proven to be wrong/illegal and they had to fix them. This took around 2 years to be done.
Not one of their business models has worked, and they change it every 6 months or so. The customers have no clue what's going on behind the scenes, except when their LPE is abruptly replaced and told not to contact the customer or else.
Newly recruited LPE's are trained to use a robotic script that comes across like when you're asked at Burger King if you'd like fries with your burger.
Their only unique selling proposition was really price, and now they're not cheap anymore.
There's more, but I feel like I'm ranting, and you are probably getting the idea.
Hi sain,
Re: JV
What do you think the response would be in the UK if they changed their fee structure to half now half later which would give the vendor a free choice of choosing their own conveyancers. An area where a lot of complaints have been received I think that would be a winner as the general public would identify that with extra incentive to drive a sale through
I think @ only £849, a lot of people who don't sell, wear it and move on. What they did in Australia would be the UK equivalent of charging £650 upfront and a further £650 on sale. They have so many competitors in the UK matching/beating their £849 price point that I believe they'd be too scared to change it. Giving the LPE an extra incentive would help, but it seems to me that the professional agents still wouldn't want to continue scraping by, working for the likes of PB.
As a first job, McDonald's is a good start for many, PB and their copycats have become the fast food equivalent in every way from the kind of staff through to the customers wanting a cheap fix as opposed to a proper healthy dinner served by someone who cares.
By the way, the Trustpilot 5-star reviews are all gushing with praise because, in that euphoric moment when a sale's agreed, people are asked to give a review. That's the moment where all outpoints, and mistakes are forgiven and forgotten.
Hi Cyberduck,
Their OZ problems have absolutely nothing to do with poor market conditions.
Great excuse for them to use though because people seem to believe it, including themselves, yet they've fired everyone so as to not take any blame personally for their flawed model.
Hi Peltata,
In Answer to:
JVS, do you think this applies to all online estate agents or do any other companies have a different model that could give a competitive edge over the traditional one?
There's yet to be an accurate UBER version of Real Estate sales, but from all the expensive mistakes currently being played out before our eyes, one will come along and be sustainable for the long term.
PB et al. are all so greedy, they can't see the wood for the trees, and until failure becomes academic, won't listen.
Austrailian Situation:
Fact- PB has been instructing 70%-80% below budget target in Australia of 650 instructions per month for most of 2018.
Fact- PB issued 2.5m worth of shares to Neil Tavender to become COO and has been in Australia trying to wave a magic wand to fix their mess. Is he a genius? Can he fix Kenny and Michael's mess? His plan= Charge the same amount as traditional agents in OZ do (The demographic PB's customers in OZ have turned out to be 80% AUD$400-$800k PROPERTIES), split it into 2 payments and still underpay LPE's. Are you kidding Neil?
Fact- Retention Rate of LPE's is approx 25%! For the last 6 months, they have trained 6-8 per month and had 6-8 resignations per month. Why would that be?
Fact- Management has been caught red-handed Bulling LPE's, Sales Associates and even customers! All reported in the local news, and all verified/fact-checked by the journalist.
Fact- Franchise (TO) contracts, Employment contracts and even Listing contracts have been proven to be incorrect and illegal. Refunds to customers have been up to dozens per week over the last few months. Past and present TO's are looking to be compensated for being misled.
If this is how upper management act and react, once the new Australian business model falls flat on its face again, will they fire Neil Tavander like they fired the last guys that failed?
My opinion is the share price probably only go up again if they pull out of the Australian market. I'd love to be told why I'm wrong!
It's days are numbered. The LPE's don't generally last long for good reason. Overworked, underpaid. The only ones that've made money are the early investors and founders. It's a very very big game of Smoke and Mirrors Dave.
It's possible PB might have a long-term business, and in the medium term they'll suffer.
However, management are a bunch of clowns, so it could be rather a lot more short-term than people seem to think. Something more sustainable, where it actually makes a profit, and agents get paid like people not slaves will have to win out.
They're hoping it suddenly takes off like a rocket, but they're overspending on advertising so fast, and without good returns, so they'll need another round of investment very shortly after Christmas to stay afloat.
Anyway, they used to charge $4500 all up in Oz when they started in December 2016, and they were flooded with customers.
Now that it's $8800, half now half later, it's not a good deal anymore by any stretch of the imagination.
The platform seems amazing at first, but really it's a clunky bit of yesterday's tech already. That's now their only perceived advantage.
Sorry, yes understood!
So if a client can pay $4400 upfront and then $4400 on sale, or $0 upfront and $8000 if they get a sale, the agent has a tough job winning the listing and then gets less than what his opposition gets for doing the job properly.
What I was trying to say is that they will keep turning over agents (retention rate is 25% and won't get better), and now the deal isn't all that compelling.