Curse of Purplebricks! Early backer Neil Woodford freezes fund as investors rush to exit

first_imgHome » News » Agencies & People » Curse of Purplebricks! Early backer Neil Woodford freezes fund as investors rush to exit previous nextAgencies & PeopleCurse of Purplebricks! Early backer Neil Woodford freezes fund as investors rush to exitFollowing shock announcement by Purplebricks that it had ditched its founder CEO and exited Australia, consequences ripple out into the City.Nigel Lewis6th June 201902,575 Views Purplebricks’ key financial backer and leading City fund manager Neil Woodford has been forced to make a grovelling apology to investors after being forced to freeze his key investment fund, and at the same time has dropped his investment in Purplebricks by 5%.The problems faced by Woodford are largely due to the collapse in Purplebricks’ share price over the past 12 months, which has persuaded many investors to exit his Equity Income Fund, forcing him to close it to any further trading.Woodford has not lost money on his Purplebricks stock yet, which is trading above the price he paid for the shares several years ago, but nevertheless he’s also lost much of their subsequent gains.At their peak they traded at £5.13p a share but are now at £1.06, a reduction of nearly 80%.Neil Woodford videoIn a highly unusual move, Woodford has posted a video on YouTube in which he says the suspension was ordered to protect the interests of the remaining investors within the fund.Woodford explains in the video that many investors were cashing-in their holdings within the fund at an alarming rate, forcing Woodford to liquidate its stock market holdings to pay these investors.This in turn was spotted by the City which then took advantage of this to offer lower and lower prices for the stock as the ‘fire sale’ continued.This is why, to prevent this continuing, trading in and out of the fund has been suspended.In the video Woodford refers to Purplebricks indirectly, saying the fund will now focus on more ‘traditional’ investments.“I am extremely sorry that we’ve had to take this decision,” he says.Purplebricks Neil Woodford June 6, 2019Nigel LewisWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021 City dwellers most satisfied with where they live30th April 2021 Hong Kong remains most expensive city to rent with London in 4th place30th April 2021last_img read more