Nothing to beat a ride on a property bubble | GulfNews.com:
"It is hard to imagine, much less find, a better exemplar of how capital gets misallocated in a bubble than British property agent Foxtons, whose stock was publicly listed last week. Foxtons, which only three short years ago was taken over by its lenders, went public and by the end of its first trading day was worth $1.2 billion (Dh4.4 billion).
That’s a bit more than double what it sold for in 2007, just before the crash, when its founder Jon Hunt sold out to private equity firm BC Partners in a deal which was at the time widely derided as marking a market top. To put it in perspective, Foxtons is now trading for a bit more than 20 times what investors expect it to earn next year.
That implies investors believe that either it will gain market share rapidly or, as real estate agent fees are a percentage of sales and rental prices, they think London real estate will continue its stratospheric rise."
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