Zillow stock plunges, on pace for worst day in nearly 7 years

Zillow stock plunges, on pace for worst day in nearly 7 years

To complement the brand new technique, Zillow introduced Tuesday its plans to accumulate Mortgage Lenders of America. Terms of the deal weren’t disclosed, however Wall Street didn’t look favorably on the tie-up.

Analysts for Bank of America/Merrill Lynch downgraded the stock Tuesday, warning its transfer into mortgage lending may damage profitability subsequent yr.

CEO Spencer Rascoff defended the transfer Tuesday on CNBC’s “Squawk Box.”

“It allows us to monetize the Zillow Offers business a second way,” he mentioned. “First, we can make money from buying and selling. Second, we can make money from mortgage origination. Third, we can make money by passing the homeseller, who doesn’t want to sell their home to us, off to a premier agent.”

He famous that Zillow’s follow of buying and promoting houses, which might take months, outcomes in delayed income. That contributed to the tech actual property firm’s weak third-quarter steering, he mentioned.

Shares took a similar beating in April when the corporate introduced the technique. But Rascoff maintained in May the technique would repay.

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