Africa-Press – South-Africa. PURPLE Group, one of the fastest rising shares on the JSE last year, has seen its price fall materially in January, in line with a global sell-off of fast growth stocks, a trend that has still not yet recovered.
The financial services company owns the online platforms EasyEquities, EasyProperties, EasyCrypto and GT247.com. Its EasyEquities platform, started in 2014, allows investors to buy fractional ownership of shares listed on the JSE and the New York Stock Exchange, and now has a million users. Purple’s traded 1.82 percent lower to R2.70 yesterday morning, bringing its year-to-date decline to 8.33 percent.
That may not seem like a big decline, but consider that the price traded as high as R3.43 on January 14, before falling sharply in the days thereafter, bringing the decline to 21.3 percent since then.
Similarly, and by way of comparison, the Nasdaq 100 Index fell 12 percent from January 12 to January 27, while the MSCI World Information Technology Index fell 9 percent between January 14 and January 27.
Purple Group’s share price however is still elevated considering that at yesterday’s price, it had increased by 848.3 percent over three years, and by 228 percent over one year.
Purple chief executive Charles Savage said in a phone interview, the decline of the share price in January appeared to be in line with the decline in global growth stocks that started in January, and continued into February. Operationally, growth of the group so far appeared commensurate with the growth experienced last year, he said.
When questioned about the ability of Purple to continue to scale up the usage of its operating platforms, Savage used Capitec as an example, saying that a decade ago many had predicted that the bank could not possibly continue to keep onboarding new customers at the rate that it was, and today it still continued to attract new clients every month.
In South Africa, for instance, their potential market was the 35 million smartphone users and “the runway is enormous for us,” he said.
Savage said he was certain Purple’s share price would recover, but that he just did not know when.
Analysts have attributed the global sell-off of growth stocks to rising interest rates globally, less liquidity in markets, and higher bond yields.
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