8 replies on “The Joneses listing is cancelled”

  2. I believe the NZ real estate market will be the poorer and the consumer the looser as a function of the company’s liquidation yesterday.

    They were a game changing business that had the right model that could have changed NZ and Australia real estate if more securely financed and with a more forgiving market than we are currently experiencing at this time.

    I have personal admiration for the shareholders and directors that gave it a go and were prepared at the end to front the media – the media that had so well supported them as they battled entrenched attitudes of the establishment of the NZ real estate industry.

    I penned last night a somewhat more in depth review of their performance over these past 18 months on the “Unconditional” blog http://www.realestate.co.nz/blog

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  3. further, as pointed out by ben kepes – how does a good company go from “about to list” to “in liquidation” inside a week? – surely such a dire state of cash-flow would not have passed the due diligence inherent to the listing process? (guess that’s why RLV #3 pulled out…)

    it’s a real shame that such a great idea wasn’t executed with effective business management to keep it going… surely a decent team would have covered themselves for a housing market downturn and been prepared to ride the current storm some time in the business’ first 5 years?

    also, the missed listing is another blow for NZX in general.

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  4. Wow that is quite a devlopment. I left NZ 3 months ago and at the time the Joneses seemed to be riding a wave of popularity. Their listings in the property press were getting quite substantial and they had a lot of public momentum. What do you think went wrong? Purely the slowing in the market, consumers resorting to tradtional sellers in a tough market? It is a shame as I liked how they were shaking up the institution.

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  5. I would like to second all of Alistair Helm comments. They were an amazing company with incredible insight into where the future of New Zealand and Australian Real Estate should be heading. What they stood for and their reasons for developing such a company can only be admired and applauded. Unlike ‘Tom’ has indicated,(referring to the team as not being ‘decent’ enough,and lacking in ‘effective business management’) I know for a fact that the team of directors leading the company were what you would call a ‘dream team’, and one of the best. All highly intelligent and very successful business men in their own right, having all a very impressive background and a long list of credentials to their names.

    I only hope that they will ‘open their doors’ again one day in the future, when circumstances are more favourable, and offer their services and learning to the Real Estate Industry which is a business that is in dire need of review and change.

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  6. @Tom
    Not sure how much of a blow this is to the NZX. This was a small backdoor listing looking to raise $1.5 – $4.0 million with a pre-money valuation of ~$14 million. Of far greater concern would be the latest developments in the proposed Fonterra capital restructuring.

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  7. @Scott – I too second Alistair’s comments; having bought and sold 3 houses in the over-heated AKL market over the last 4 years I know first hand what a breath of fresh air the Joneses model is / was. I have been following them with great interest and had high hopes for their success. I also know Chris Taylor – and I know he is absolutely gutted; as I assume are the rest of his fellow founders / directors and employees. I agree with you Scott – a fantastic team, it would be hard to imagine a better one for this business.

    But the simple fact is they didn’t succeed – they failed to prepare for an inevitable slowing of the housing market, and they didn’t have enough capital to meet the demand that their model needed (and in fact delivered) to survive. It really does suggest very poor planning and / or management of cash-flow – albeit alongside a very nasty combination of unfavourbale conditions in both the stock market and the housing market – to go from pulling a listing in the morning to in liquidation in the afternoon. I suspect that this is the result more of poor advice given to the directors than the ‘fault’ of the directors themselves. Unfortunately, the directors have full accountability.

    So, I really would like to see this team learn from the experience and have another crack – I think there is that much demand for, and interest in, their model that they could well do that and pull it off without any consumer backlash or fear.

    @Sam – fair call, a much smaller issue than the apparent back-tracking of the Fonterra listing. On the other hand, death-by-a-thousand-cuts can be be very hard to foresee. I don’t think the NZX is in critical care or anything – more that the growth ambitions they have will be very tough in the current climate.

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  8. I think their model looked good but they clearly didn’t do their sums on the business side. Coming from the UK I have found the NZ real estate model hard to work with. Who can you trust? What are the motives of the agents? In the end you try and find one you can trust rather than one who might get you the best price.

    Also they got caught in a market downturn. That happens.

    Reminds me of an investment I made back in 1999 into a fuel cell company called Zetekpower. It was due to IPO with a valuation close to $1bln. By the time they came to the market they couldn’t get it away and then ran out of money. They still presented the business as a going concern even when it wasn’t and ended up in receivership. Needless to say the shareholders got screwed, the directors emerged unscathed even though there were serious questions about their actions and presentation of the true financial position. A familiar story no doubt.

    But the parallels are there: new type of business not quite making it but it doesn’t change the fact that the idea was good. But the question remains as to how companies are presented and who is responsible: the company who does the valuation or the directors? When do you put your hand up and say it’s not the true picture?

    The Joneses may be history but their model will be back.

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