That it thinks the stock will approach 400p and a 79% decline in value in only a year since an IPO is not exactly what we investors are looking for. Nice of Bank of America Merrill Lynch to tell us, of course, but perhaps it could have opined this a little earlier?

From my vantage point this doesn’t come as the greatest of surprises, as I don’t think Aston Martin is large enough to be able to survive as an independent. Even the market segment it is trying to address isn’t large enough. I’m not talking about how well it makes its lovely cars, nor how many of us boy racers lust after one. It’s that the niche it is trying to fill doesn’t produce enough revenue to carry the costs of the business model.

This is an opinion, no doubt about that, but there’s perhaps good reason why the luxury marques aren’t independents. They tend to nestle inside much larger groups – there are exceptions, like Morgan, but the economic model I’m employing explains that.

In order to make those top-end cars, it’s necessary to be, well, making top-end cars. The latest and greatest technology must be included, and to do that it’s necessary to develop that new tech in-house. This is expensive – developing new tech always is.

Sure, it’s always been true that the tech – say, ABS, disc brakes, automatic steering or gearboxes – developed for top-end brands ends up a decade or three later in the mass market. But there’s still this difficulty of paying for that development.

Something developed for a Roller these days will soon enough end up in a 3 Series. Whatever Bentley’s next gizmo is going to be will arrive in a Skoda at some point. But BMW can therefore spread those development costs – amortise to use the jargon – over all Beamer sales, VW the same across its brands. Further, those mass market sales revenues can be used to pay for that top-end marque development.

Which is, I think, the Aston Martin problem. It has to carry the costs of that technological development without having the mass market sales to pay them off in the fullness of time. Nor does it have the mass market revenues to finance those development costs today.

I simply don’t see it as being possible to be a £1 billion company – both in corporate value and turnover, approximately at least – and carry those development costs long term. There is, after all, a reason why the company has gone bust seven times already over the century or so.

Morgan survives because when was the last time it changed anything it does, let alone its technology?

Aston Martin will, I think, have to accept a buyout at some point and become that star brand within a wider company. The costs of trying to go it alone are simply too high.

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Neither Tim nor The Motley Fool UK have a position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

One way of reading it is that as the clouds clear under the new fund management then the Purplebricks price will recover. There is, after all, something of an overhang there, and there have been substantial sales. The other is that there’s something else to worry about and I’m in that second camp.

The company was backed by Woodford’s funds early on, and it was one of the major paydays when it listed then soared. So far so good, a justification of the investment style. There’s nothing wrong, after all, with the idea of invading a business as staid as estate agency. Maybe not having to pay for high street shops, combined with a flat fee upfront rather than commission system, will work? But then the cracks started to appear.

The first was concern over revenue recognition. So, if an upfront fee is paid then when does that actually become income that profits can be calculated from? It’s not when the cheque is received, for there’s still much work to be done. We also shouldn’t insist that the sale must have gone through before recognition as, after all, it’s not a ‘no sale, no pay’ fee. Worries about this produced the first setback for the Purplebricks share price.

Then there was the foreign expansion that blew up. And then this summer and autumn, we’ve seen the Woodford effect in reverse. The problem was having too much in illiquid stocks to pay off redemptions – always a possible problem in an open-ended fund. That meant having to sell down, aggressively, stakes in more liquid holdings – Purplebricks being one of those. From June to September the stake went from 29% to 17.64%. That’s a lot of selling and it would, in the absence of anything else, have dropped the share price.

Which brings forward our question – is it just that selling depressing it? And now that the funds are under new management, no longer gasping for liquidity, will there thus be a bounce?

There could be, but I doubt it. For I’m worried about those two more basic things. Firstly, the essential idea itself. Companies work better when incentives are aligned. Payment by results is the way to motivate salesmen and thus a percentage fee on a sale seems to me the right way to be running an estate agency. I think this will become more obvious during the next housing price downturn.

Secondly, that revenue recognition thing. Because of the past movements in that, what is booked as a profit and when, we don’t really know whether the model even works today.

There could be a Purplebricks share price bounce as the Woodford fund selling pressure lifts. But I’m willing to bet that there won’t be for more fundamental and underlying reasons. Steer clear.

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Neither Tim nor The Motley Fool UK have a position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In that is the basic problem facing the commercial property companies in the retail space. It’s not obvious that the likes of Intu (LSE:INTU), or its sometime would-be purchaser Hammerson, have a good way out of it either.

The problem here is the internet. As the Office for National Statistics points out, the last quarter of 2018 saw online taking 20% of retail sales. Back a year, that was more like 15 or 16%. And back a year, we have 15% of UK retail space empty and looking for a tenant. This isn’t a coincidence, of course – that eating of the market by online means we just need less retail space on those High Streets. What’s left is worth less, too.

However, there’s a quirk in UK commercial leases. They might be for 25 years – just an example – with three or five-year rent reviews. But it is always true that rent reviews are upwards only. So, if trading conditions slow down, or if Amazon starts eating lunches, rents rarely go down to reflect the market.

It’s even true that, to a certain level, the owners of the centres prefer to leave some units empty rather than rent them out at the new, lower market rents. The asset value of the entire set is usually not at actual rental income, but at what it would get rented at what it’s currently rented at. That is, an empty shop or two doesn’t devalue the development because the usual method is to assume that it will rent out for what all the other, older leases are on. But the moment it is let at new, lower rents then this devalues the future value of all of the other leases in the centre.

Yes, an oddity, but there we are. What this means is that we’ve not got a manner of gently bringing rents down if the market itself starts to change. Instead, what’s necessary to bring existing rents down is the near bankruptcy of the tenant – perhaps actual administration, maybe a company voluntary arrangement (CVA) – so that it is possible to force the landlords into some agreement.

Which is exactly what Mike Ashley is doing. Picking up distressed retail assets then shouting very loudly that rents have got to fall or he’s taking his ball home.

The problem for Intu is that there’s no interesting way out of this. Its assets are worth less than they used to be and the prognosis is less next year than this. The system also conspires to make it happen in lumps, in great juddering leaps, as retailers go bust or CVA their way to rent reductions rather than being a gentle and managed decline.

One to avoid for me.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tim Worstall owns no shares in any company mentioned. The Motley Fool UK owns no shares of any company mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.