Gumtree sells Hotcopper, news business to ADVFN
Tommy Logtenberg
Classifieds business Gumtree Australia has entered a binding agreement to sell investor forum Hotcopper to UK financial data platform ADVFN.
The $6.8 million deal includes Gumtree’s The Market Online financial news site and Canadian forum Stockhouse, and marks Gumtree’s exit from what it describes as “higher capital requirement” content businesses.
“As part of our ongoing transformation, we continue to streamline operations to focus on our core strengths in advertising and classifieds, and to exit businesses with a higher capital requirement,” Gumtree CEO Tommy Logtenberg was quoted as saying in the ASX announcement.
Tommy Logtenberg
Gumtree’s business has until now been divided in two parts: “classifieds” and “capital markets”. The former contains Gumtree, Carsguide and Autotrader, while the latter housed Hotcopper, Stockhouse and The Market Online.
When contacted for comment about the status of The Market Online, Logtenberg confirmed it too was moving to ADVFN, writing “it is indeed a good fit with the rest of the Capital Markets.”
Of the sale price ($6.8m), $3.55m will be used by Gumtree to pay down debt and $1.3m of Canadian bank debt will be taken on by ADVFN. That should leave Gumtree with around $2m in cash, having divested itself of the forum that originally lent its name to the company.
The Hotcopper forum formed in the 1990s as a place where retail traders could swap market information and tips. In 2016 it listed on the ASX (for the second time following a brief stint in 1999) as Hotcopper Holdings Ltd in an IPO that valued the business at $22m, changed its name to The Market Herald Ltd in 2020, then purchased Gumtree Australia, Carsguide and Autotrader for over $86m in 2022.
The company was rebuked by the Takeovers Panel in 2023 over insufficiently transparent share dealings, has been renamed several times, and has suffered generally through a period of corporate turmoil. Its annual report for 2024 showed a loss of $8.4m, including legal fees and settlements with former management.
Gumtree Group chairman Bruce Rathie said the company would now be focusing on growth opportunities in classifieds. Gumtree announced in May it had signed an MOU with one of New Zealand’s biggest media companies, NZME, to work together on car classifieds.
“The decision to divest the Capital Markets Business has been a difficult one for the Board, but the approaches by third parties to purchase the Capital Markets Business prompted a strategic review which led the Board to the conclusion that the long-term interests of shareholders were best served with a focus on the much larger Gumtree Group business which has the potential to grow strongly going forward and to drive long-term value,” Rathie was quoted as saying.
