Seeking Alpha

Bloomberg: Zillow looking to buy Trulia

  • Bloomberg reports Zillow (Z +18%) is looking to acquire Trulia (TRLA +21.6%). Shares of both companies have skyrocketed in response. Move (MOVE +5.2%) is also getting a lift.
  • The report comes 9 days after Realogy announced it's buying ZipRealty for a 100%+ premium.
  • Zillow's market cap is currently at $5.9B, and Trulia's at $1.9B.
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Comments (12)
  • Steven Couche
    , contributor
    Comments (289) | Send Message
     
    Great opportunity...to short more.
    24 Jul 2014, 02:10 PM Reply Like
  • Parker Logan
    , contributor
    Comments (247) | Send Message
     
    that's some risky business. not a screaming buy ... but shorting a category leader?
    24 Jul 2014, 03:48 PM Reply Like
  • Tom Shaughnessy
    , contributor
    Comments (1148) | Send Message
     
    Real Biz is a very small player in this space that can be a good opportunity.

     

    http://seekingalpha.co...
    24 Jul 2014, 02:11 PM Reply Like
  • Zoomiesa
    , contributor
    Comments (79) | Send Message
     
    Good luck on your short Getting Long. I still have my large position last year (started in the low 30's) and have been reading how shorts would be making a killing since. Read my previous posts - I've counseled these folks to hedge their shorts with options. Sadly, these experts have responded with either derision or vitriol.
    24 Jul 2014, 02:48 PM Reply Like
  • Christopher_R
    , contributor
    Comments (9) | Send Message
     
    If this happens, who are the viable competitors in this space MOVE? Zillow's product needs improvement, but the lack of competitors in this space will allow them to improve the product so information is more accurate. Combined revs last quarter ending 3/31 of TRLA and Z were 120 million. If Z continues to improve it's product and operate in a vacuum the current 6 billion dollar market cap will be in the rear view window. Remember FB operated for a while with no competition by the time google + came along FB was too established.
    24 Jul 2014, 02:59 PM Reply Like
  • aow
    , contributor
    Comments (144) | Send Message
     
    I don't see there being too much competition. They're positioning themselves to be the Google of real estate search and I don't think the likes of Zip, Move, etc really have much to offer at least based on my use of their sites.
    24 Jul 2014, 03:25 PM Reply Like
  • bud777
    , contributor
    Comments (18) | Send Message
     
    I think Zillow is vulnerable. The consistent errors in their data make them pretty useless for a serious buyer or seller. Eliminating competition is essential to their survival. At some point some one will bring a successful class action suit against them for mis-representing home values
    24 Jul 2014, 03:27 PM Reply Like
  • aow
    , contributor
    Comments (144) | Send Message
     
    Isn't it called an estimate, or, ahem, zestimate? I don't think any consumer w/ half a brain would rely on that. Not sure they'd have a very good misrepresentation law suit all things considered. Homes are really too unique and their value too hard to properly quantify for any such # to be accurate.
    24 Jul 2014, 04:07 PM Reply Like
  • Zoomiesa
    , contributor
    Comments (79) | Send Message
     
    With the millions of homes in the US, it would be totally impossible for Z to be right on the mark every time. People remodel, landscape, school access, etc. It would be impossible for them to get exact values.

     

    Zillow uses an algorithm based on market comparables in a given radius. If a home is on a neighborhood perimeter, with higher or lower priced homes in the circle, there will be some distortion. MLS had a similar problem in cities/communities where they used their "estimating equivalent value" tool. Of course, most of these estimates are based on square foot market $ market comparables - not taking into account stucco versus brick, or slate roofs versus asphalt. Their algorithm does factor in number of bedrooms/bathrooms. They just don't have resources for a professional estimate of each home.

     

    Have seen lots of complaints from one fellow (who is neither long nor short Z) that seems irate. They have offended him with an underestimate. A. What a moron. B. He should take up weaving or cross-stitch to calm down. That's why Z has all kinds of disclaimers and call house values, ZESTIMATES. Of course, according to law professor Alan Dershowitz, "People have the right to sue a ham sandwich."
    24 Jul 2014, 05:11 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1558) | Send Message
     
    I never understand why people would get offended with estimate. It's not like buyers/sellers would use that as final word. My personal condo is fairly underpriced on Zillow since my building is arguably the best in the area. On flip side, a rental I had in SF was way over estimated for various reasons. Who cares ...
    25 Jul 2014, 12:51 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (816) | Send Message
     
    FYI, I just sold a condo for dramatically higher than Zillow estimated. It was in San Francisco as well.
    25 Jul 2014, 12:58 AM Reply Like
  • mr clark
    , contributor
    Comments (689) | Send Message
     
    I think when the housing market collapses again, so will these companies, or the combined version... not too long now!
    25 Jul 2014, 02:20 AM Reply Like
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