Collapsed online real estate agent Purplebricks was clearly very bad at selling houses. But in case you needed more evidence of the company’s complete sales ineptitude, it has just negotiated a deal to sell itself for £1. Chairman Paul ‘5 Pence’ Pindar said that he was ‘disappointed with the financial value outcome, both as a 5 percent shareholder myself and for [other] shareholders.’ Don’t spend it all at once.

The lowdown

• 🏚️ Purplebricks sells itself for £1, though shareholders will keep up to £5.5 million in cash.

• 🚗 No. 3 carmaker by sales Stellantis tells UK it must renegotiate Brexit deal or risk factory closures.

• 🍿 Netflix ad tier now has 5 million monthly active users.

Flex your finance muscle

A case against share buybacks

The scale of share buybacks has tripled since a decade ago ($) and has almost reached the level that companies pay out in dividends.

The main case against them is that they can be used to artificially inflate metrics like EPS, and can benefit executives who have their compensation tied to such metrics. They can also indicate a lack of productive investment opportunities. 

Possibly the most damning evidence against them, though, is the Invesco ETF that invests in companies that have bought back 5% or more of their stock in the previous year. If buybacks were all they are cracked up to be, perhaps it would not have underperformed the S&P over the last 10 years ($).

Featured stories

Asos faces a ‘challenging trading backdrop’

Asos shares have lost more than 90% of their value since peaking in March 2021 when consumers had little option but to buy their clothes online. 

In its most recent half yearly, the company reported a pre-tax loss of £291 million. Its sales fell by 8% which is a lot worse than the 3% fall forecast by analysts. Asos also had to write down more than £100m on unsold stock. Looking ahead, the company anticipates that sales will continue to fall, predicting a decrease of at least 10% for the year. 

The company’s position may not be as precarious as it seems. If they can’t sell enough stock, there are rumors that a sale of the company could be an option ($). Even so, maybe do your bit by treating yourself to that new t-shirt. (In the course of writing this, I genuinely bought two new t-shirts.)

The content we're consuming today

• Epsilon Theory: The United States of Bed Bath & Beyond.

• WSJ: Lyft Taps New CFO Amid Layoffs, Soft Earnings Forecast.

• Bloomberg: Sweetgreen Tests Robots to Make Faster, More Efficient Sad Desk Salads ($).

Off-balance sheet items

• The Cannes Film Festival has begun – here is a look at the red carpet, if that is your thing. But I’m more excited for the release of Martin Scorsese’s new film ‘Killers of the Flower Moon’, which there doesn’t seem to be a trailer for.

The bottom line