Rightmove Shares Drop 7% After JP Morgan Advises Investors to Sell

January 18, 2024

Shares in UK number one Rightmove have tumbled by as much as 7% in the past 48 hours—one of the biggest drops on the stock market—after America's largest bank told investors to divest from the portal.

Share prices fell from 564.2p on 16 January to 522.2p this morning after JP Morgan advised shareholders to sell their shares as a response to the CoStar Group's entry into the UK market.

However, the dip is a drop in the ocean compared to October's share price stumble when CoStar's GBP 100M bid for OnTheMarket became public; shares hit a two-year low to 459.0 pence on 21 October.

JP Morgan analysts believe Rightmove has underestimated the ramifications of CoStar's purchase of OnTheMarket, the likely destabilisation of Rightmove's main competitor Zoopla, and the costs involved in retaining its market leadership position.

OnTheMarket has already been promised a marketing budget of £46.5M this year alone—more than three times Rightmove's current media spend.

Should Rightmove accept the challenge, the reality for shareholders is that there will be less cash available for historically generous share price growth and end-of-year profits, which would likely impact dividends.

For a closer look at the context behind the so-called "The War on Zillow and Rightmove" (coined by yours truly), Edmund's analysis published this week is an excellent read.

January 18, 2024
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

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