Zillow Group Inc. (NASDAQ: Z)
Zillow, the company founded to help homeowners not only self estimate and evaluate the value of their home for a sale but also to offer today, an avenue for prospective buyers to find those homes reported guidance for their fiscal first quarter earnings after the market closed for trading on Thursday April 12th 2018.
The company created a new word-Zestimate-(however,it is not in the formal dictionary as of yet) to give verbage to the estimate that homeowners traditionally have used for pricing their homes and generally left to the Realtors to determine. They also announced that they were getting into a version of the house flipping business in Phoenix and Las Vegas.
Now, Zillow is going to start playing the role of investor, bidding on homes in Las Vegas and Phoenix using cash from its balance sheet to finance acquisitions. In a phone interview, Chief Marketing Officer Jeremy Wacksman described the program as a test, projecting the company will own 300 to 1,000 homes by the end of the year.
Unlike traditional home-flippers who bet they can make money on home appreciation, Zillow plans to profit by charging sellers a fee in addition to agent commissions. Wacksman said most owners who use Instant Offers wind up selling their homes the old-fashioned way, but that people like to have choices.
Shares close the regular trading session up $0.39 closing at $53.60. However in the aftermarket session, which was fairly volatile, shares closed down $3 or 5.6% at $50.60.
Zillow Chief Marketing Officer Jeremy Wacksman had this to say to investors,
“Even in today’s hot market, many sellers are stressed and searching for a more seamless way to sell their homes. They want help, and while most prefer to sell their home on the open market with an agent, some value convenience and time over price.
This expansion of Instant Offers, and Zillow’s entrance into the marketplace, will help us better serve both types of consumers as well as provide an opportunity for Premier Agents to connect with sellers. This is expected to be a vibrant line of business for us and for our partners in the real estate industry, while providing homeowners with more choices and information.”
The After Hours Chart
The above price chart shows Zillow in the after hours session in the right shaded area and on the regular trading session in black on the left. It is pretty apparent that the news was interpreted both ways, both good and bad. Initially it was thought to be good, and then you can see how shares sold off and close lower.
Zillow Group, Inc. operates real estate and home-related information marketplaces on mobile and the Web in the United States. The company offers a portfolio of brands and products to enable consumers find information about homes and connect with local professionals.
Its brands focus on various stages of the home lifecycle, including renting, buying, selling, and financing. The company’s portfolio of consumer brands comprise real estate and rental marketplaces, such as Zillow, Trulia, StreetEasy, HotPads, Naked Apartments, RealEstate.com, and OutEast.com.
It also provides a suite of marketing software and technology solutions; and owns and operates various business brands for real estate, rental, and mortgage professionals comprising Mortech, dotloop, Bridge Interactive, and New Home Feed. In addition, the company offers advertising services. Zillow Group, Inc. was incorporated in 2004 and is headquartered in Seattle, Washington.-YahooFinance