Zillow Group Inc. revealed on Thursday afternoon that it had sold or was in the process of selling more than half of the homes it purchased in a home purchase earlier this year, prompting the company to close its Incentives business. .
Last month surprised investors when it announced it would be shutting down the home buying business of Zillow Deals. and laid off a quarter of its employees after buying nearly 10,000 homes in the third quarter at prices predicted to lead to huge losses. On Thursday, the company announced that the division’s revenue would be the highest compared to previous estimates, and that executives plan to use some of the cash they have accumulated to buy a home instead of buying a home. $750 million back in stock.
“We are pleased with the progress of our mitigation efforts and recognize that decommissioning Zillow Offers will allow us to have a more efficient balance sheet of capital and business going forward. hybrid,” said Zillow CEO Rich Barton in a statement. “With that in mind, we see today as the opportune time to announce the share buyback and cash balance reduction program that we have built to support Zillow Coupons.”
Zillow says that more than 50% of their homes are currently under contract or that they have agreed on disposition terms for them. Management now expects $2.3 billion to $2.9 billion in revenue for the home-buying business in the fourth quarter, after previously giving guidance of $1.7 billion to $2.1 billion. . Executives said on Thursday they continued to believe the shutdown would at least be neutral to cash flows, including paying off nearly $3 billion in secured debt.
Zillow stock jumped nearly 9% in after-hours trading following the announcement. Shares suffered a price drop following last month’s disclosure, and ended Thursday’s regular trading session, down 45.2% over the past three months. Overall, Zillow stock is down 58.2% so far this year, while the S&P 500 index is down.
grew 20.2% during that time.
https://www.marketwatch.com/story/zillow-says-it-has-sold-more-than-half-the-homes-it-owns-commits-cash-to-stock-repurchases-11638480494?rss=1&siteid=rss Zillow shares rebound after company says it is selling homes faster than expected, will buy back shares for cash