Secondary Market – October Update

Secondary Market – October Update

26th October 2020 by Joel Ippoliti

October’s market was strong coming in at £462k transacted across 2,153 sharelots between 598 buyers and 490 sellers in 170 businesses at an average value per business of £2.72k. Each seller made an average profit of £408 delivering real cash returns back into investor accounts. 

Compared to September’s market, in which £386k was transacted, October saw an increase of 20%, but was down vs the last 6 month average by 16%. So, we are starting to see the impact of Revolut’s big round fade and variable pricing benefits kicking in as the market stabilises to a new equilibrium. 

The sharelot sales volume by price tier were as follows:

These sharelots can be broken out by sector as follows:

Top15 total value transactions by business as follows:

Continuing the trend from the last market there were more sales (by number of share lots) at the premium end of the market than at a discount (blue bar is lots completed, green bar is business count) and that was across significantly more businesses:

For November’s market (the next market open window) we have £6.1m submitted for sale from 2,165 sellers with most lots submitted to sell at a premium:

To give a little more information this month on submitted sharelots, below we can see, by day of the month, how much value is submitted by day. The big spikes are when the market closes and the auto-relisting feature kicks in.

In terms of sell side demand you can see from the below that it has been steadily increasing and the difference between shares being submitted and then subsequently listed (conversion) is driven the eligibility status of businesses, which tracks at about 70% regardless of volumes.

Below you can see a big jump in sellers submitting sharelots along with the value of those sharelots. We’ve had a number of initiatives launched which drove this including releasing the £1k limit, auto relisting and removing the limit on number of sharelots.

These changes have also impacted the number of businesses submitted for sale and how much has been submitted.

A subject of much chagrin from buyers is when sellers don’t honour a sale and I thought I’d share one of the dashboards I use to track this. 

Here I track sellers rather than sharelots or value as I am most interested in the user behaviour rather than the financial impact. I do have measures in place for the others (not shared here) but the challenge in reading those results is that they vary wildly from market to market – 1 seller could cancel a very large lot for example and it would skew the insight I am after. Here we get a good insight into how our changes are again impacting seller’s behaviour and in particular what happened when variable pricing was introduced. The vertical line indicates when we turned on notifications on the platform to alert sellers to honour their sale. 

We are continuing to closely track the market performance and expect to announce further improvements to the journey in December’s market. We had planned to update the checkout experience for everybody by now but due to other priorities we have delayed this until late December so it will likely be January before we see those hit the market. Stay tuned and we’ll announce more on the product improvement front shortly.

Joel Ippoliti

Joel Ippoliti

Chief Product Officer

Digital Agency Kent