Seeking Alpha

More on Zillow/Trulia

  • A source tells Bloomberg Zillow (Z +18.8%) could value Trulia (TRLA +28.7%) at up to $2B in a deal. That would imply an acquisition price of ~$54/share.
  • The source adds a deal could be announced as soon as next week. Bloomberg cautions talks remain ongoing.
  • The rumored price represents a ~33% premium to Trulia's Wednesday close. Nonetheless, it values the company at 6x 2015E sales, a multiple well below the 12x sported by Zillow as of yesterday's close.
  • Perhaps more importantly, there's plenty of enthusiasm on the Street for a deal that would create a clear-cut leader in what remains a very fragmented online real estate market that still only accounts for a small (but growing) fraction of total U.S. real estate services spend.
  • Earlier: Zillow reportedly looking to buy Trulia
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Comments (7)
  • wyostocks
    , contributor
    Comments (8852) | Send Message
     
    Let me understand this-----Two companies that make no income are combining and the market cap for both goes up by billions of dollars. I love it when companies are valued at multiples of SALES because they have no EARNINGS.

     

    No bubble here folks just keep buying. I am going to add to my pets.com stock now.
    24 Jul 2014, 02:39 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (7484) | Send Message
     
    Well FB had no earnings until it had a ton of earnings. Z earnings would likely explode in a combination... whether or not it would be worth this new combined value is a different story.
    24 Jul 2014, 02:50 PM Reply Like
  • aow
    , contributor
    Comments (144) | Send Message
     
    Yup. Google wasn't exactly a value play at first either. I'd imagine the deal is going to heavily stock based so makes sense to strike while Zillow still has a high PPS.
    24 Jul 2014, 05:02 PM Reply Like
  • Intangible Valuation
    , contributor
    Comments (613) | Send Message
     
    Comparing GOOG to FB or Z or TRLA is ridiculous. And aow, Google was profitable from the day of the IPO -- FB, Z, and TRLA not so.

     

    That said, shorting Z after it has used its own expensive stock to buy TRLA sounds attractive.
    24 Jul 2014, 05:33 PM Reply Like
  • thisstinksagain!
    , contributor
    Comments (95) | Send Message
     
    you're comparing this to facebook?? let's start with the fact that facebook doesn't have the 100lb anvil tied to their neck when it comes to spending on sales and marketing in comparison to this overvalued/overhyped company.
    24 Jul 2014, 06:13 PM Reply Like
  • 81george
    , contributor
    Comments (297) | Send Message
     
    How a company Z with no cash reserves, profit and a significant free cash flow going to pay 2 billion? OK, it will be a stock payment M&A. 2 billion of new stock issue? Treasury stocks?
    Who will foot the bill, existing Z shareholders? In any case, paying 2 billion for a company that is realistically worth less than a billion ( well you can argue that, say its worth 1.4 now) is another M&A disaster. Do you know, that only 20-30% of all M&A transactions prove to be successful in the long run. I don't think Z will be among those success stories.
    25 Jul 2014, 05:18 AM Reply Like
  • ericvn
    , contributor
    Comments (15) | Send Message
     
    Completely agree with you. Meanwhile shorts getting squeezed a bit (including me) but will be patient. DId you see Deutsch Bank with 63$ buyout price? lol how is that even possible. Cheers
    25 Jul 2014, 12:22 PM Reply Like
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