Secondary Market – June update

Secondary Market – June update

16th June 2020 by Joel Ippoliti

When investing, your capital is at risk.

June’s market saw 1,371 sharelots sold by 564 sellers across a record 171 businesses to the value of £651k to 637 buyers. Each seller made an average profit of £678 as our market proves, every month, to deliver real, cash in the bank returns to our customers in the ultimate validation of our proposition. 

We saw our strongest ever sell-side demand with over £5.8m worth of shares submitted for sale and £4.6m listed (the difference being due to ineligibility) and our highest ever number of sellers at 1,900. The £4.6m that was listed was split out across 4,226 lots and you can see their sales distribution below.

Overall, values (£) traded were down on the previous record month by around 50% mainly due to Revolut buy side demand being limited to existing shareholders (Revolut had imposed this limitation), the strength of which was a key driver previously. 

The sharelot sales volume by price tier:

These sharelots can be broken out by sector as follows:

…and values by business as follows:

We ended with a clearance rate of 14% by value (£4.6m listed against £651k sold) and 32% by volume (4,226 lots listed against 1,371 sold). 

We had scaled our infrastructure significantly in preparation for this market, which performed well, with the service being available at all times and previous firewall issues sorted. We did detect some degradation of service in the initial opening minutes which we have since addressed as we continue to iterate and improve the ability of our application and infrastructure to scale in response to rapid changes in demand. 

We previously enabled an in-platform notification alerting sellers to confirm a sale once a buyer had been found. We had seen a significant drop in cancellations because of this, from a 6mth average 5% down to 1.7% in the previous market with this market being no different, now at 2%. Still, 2% is 2% too much, so we will in future look to expand this feature to SMS, knowing that awareness is the main challenge we need to overcome (besides revising the process completely) and that we have good results from this update.

In this market we allowed sharelots to be listed whilst the market was open (and now at all times) with only one exception – if there were no sharelots submitted in that business as of Monday at 11am, before opening. We saw a number of investors take advantage of this feature with 832 sharelots listed mid-market, of which 261 sold, worth about £60k. Sensationally, we’ve now seen investors submit a sharelot that has sold within 5 minutes – it seems the future is here now!

Hopefully you will have also noticed the tweak to our Invest page which brings both the primary and secondary businesses together. It takes us closer to being able to deliver a breadth of businesses, all hosted in one place to give the investor more control to filter and sort more easily, to find the investment opportunities that interest them. We are still in early days on the path to realising our vision and we accept that presenting long lists isn’t the answer. However, it is an important step and presenting them in this way better demonstrates the breadth and depth of our proposition. 

Some people may not be aware that you can use the below element to switch between a list and a grid view of the “live pitches”. If the list view is selected (as depicted below), you can now switch between live pitches and secondary market opportunities, subject to the filters you have set. Have a go and let us know what you think!

For July’s market we already have £4.2m submitted for sale (over 80% of which was submitted from the auto relist feature) from 1,546 sellers. I expect this number to continue to increase through to market open on July 7th.

Joel Ippoliti

Joel Ippoliti

Chief Product Officer

Digital Agency Kent