Zillow performed a rug pull last night in announcing they were exiting the home buying business. Total shock to everyone on the call and the stock is paying for it. Down 10% yesterday, down 15% this morning.
Huge earnings miss as they're selling some 7,000 homes for losses that were purchased in overpriced markets. 25% of their workforce will be laid off. From the call below:
Fundamentally, we have been unable to predict future pricing of homes to a level of accuracy that makes this a safe business to be in. We hadn't modeled this kind of pricing market nor supply market to even be possible when we got the business going. What it boils down to is our inability to have confidence in pricing in the future, enough confidence to put our own capital at risk that we don't have to.
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