![]() As a result, valuation took another hit as the stock traded eventually traded below $60 for the first time in nearly 16-months. A week later, it was publicized that Zillow was looking to unload roughly 9,800 homes it already owns - plus another 8,200 it was in the process of buying, with Zillow expected to lose between 5% to 7% (WSJ). Moreover, ZG would cut a quarter of its workforce, mainly from Zillow Offers. On November 3, ZG announced a surprise loss, driven by Zillow Offers which the firm announced would be shut down. ZG lost about 10% in value that day, though the stock soon recovered. On October 18, it was reported that ZG would no longer acquire homes through Zillow Offers as the firm looked to work down its backlog. Management also touted that “the business model has proven quite durable” and the housing market was supported by the “great reshuffling” as COVID drove more to relocate from cities and employers. In August, ZG noted plans for a robust hiring spree to increase its workforce by 40% in 2021, the bulk for its Zillow Offers unit. In February 2021, ZG referenced new risk factors associated with their Zillow Offers business. Nearly all of them were tied to Zillow Offers, with mentions of competitor efforts to offer a similar service and Zillow’s difficulty to “evaluate potential future performance of Zillow Offers without the benefit of established long-term track records,” either through itself or by competitors. There were also significant changes to the language of repeated risk factors, those listed across earlier statements (see below). In their words, these fresh risks included, “Our Zillow Offers Business Depends on Our Ability to Accurately Value Homes and Manage Inventory and a Failure to Do So May Have an Adverse Effect on Our Business and Financial Results,” and “Our Zillow Offers Business is Dependent on Our Ability to Expeditiously Sell Inventory…” All seven risk factors referenced Zillow Offers, ZG’s program for buying homes directly from owners, then reselling them in the open market. That month the company also released its 10-K, which included seven new risk factors not shown in the prior year’s annual report. In February, ZG hit an all-time high at $212.40. Image Source: Google ZG Stock Hits All Time-High 10-K Filings Foreshadow Drop In 2018, Zillow began to directly buy houses and quickly resell them on the open market to take advantage of the surging real estate market.Īfter peaking in February 2021, Zillow Group (ZG) stock value experienced a long decline throughout the year. ![]() Zillow, along with Trulia, which it acquired in 2015, were the first to offer an online real estate marketplace. To understand the limitations of lazy prices and the importance of getting a complete picture, look at Zillow Group (ZG).
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