Seeking Alpha

The deal gets done: Zillow buys Trulia for $3.5B in stock

  • The combined company will maintain both the Zillow (NASDAQ:Z) and Trulia (NYSE:TRLA) brands, and Trulia CEO Pete Flint will remain so, reporting to Zillow chief Spencer Rascoff.
  • As for terms, Trulia owners will receive 0.444 shares of Zillow for each share of Trulia they hold, valuing Trulia at a 25% premium to its Friday close.
  • A conference call is set for 9 ET.
  • Source: Press Release
  • TRLA +16.8% to $65.76, Z -2.6% to $154.70 premarket
Comments (16)
  • Steven Couche
    , contributor
    Comments (268) | Send Message
     
    $3.5 billion in stock is significantly cheaper than $1 bil in cash and $1 bil in stock. Zillow was well advised.
    28 Jul 2014, 08:42 AM Reply Like
  • Mark Krieger
    , contributor
    Comments (4378) | Send Message
     
    then why is Z getting spanked this am?
    28 Jul 2014, 09:04 AM Reply Like
  • Steven Couche
    , contributor
    Comments (268) | Send Message
     
    Because they think Zillow stock will be worth something in a few years.
    28 Jul 2014, 09:16 AM Reply Like
  • yliu54
    , contributor
    Comments (171) | Send Message
     
    Certainly well advised, since a company like $Z has only pennies in cash.
    28 Jul 2014, 03:53 PM Reply Like
  • Surbiton
    , contributor
    Comments (131) | Send Message
     
    Because Zillow stock will drop and Trulia negotiated well
    28 Jul 2014, 09:13 AM Reply Like
  • 81george
    , contributor
    Comments (291) | Send Message
     
    Can someone please tell me where 3.5 billion worth of Z stock comes from? Was there a stock dilution? Or existing shareholders just swapped their shares for TRLA?
    28 Jul 2014, 09:15 AM Reply Like
  • Nigel D'Souza
    , contributor
    Comments (271) | Send Message
     
    I believe Zillow is offering the shares in the form of options to TRLA shareholders at the conversion rate of 0.444 Zillow share per share of Trulia.

     

    When these stock options are exercised it will result in a share dilution to current Zillow share holders. Based on todays numbers, this dilution should be greater than 50%. Ouch.
    28 Jul 2014, 09:31 AM Reply Like
  • optionsgirl
    , contributor
    Comments (5038) | Send Message
     
    Correct me if I'm wrong, but I believe both of these stocks are (terribly) unprofitable.
    What's the attraction here?
    28 Jul 2014, 10:15 AM Reply Like
  • Lakeaffect
    , contributor
    Comments (1153) | Send Message
     
    optionsgirl - Market Top. Plain and Simple.
    28 Jul 2014, 10:25 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (1399) | Send Message
     
    Synergy and eyeballs!

     

    You don't remember party from 1999 ?
    28 Jul 2014, 12:13 PM Reply Like
  • loufah
    , contributor
    Comments (269) | Send Message
     
    Because they'll be bigger and competition will be reduced, they ought to be able to extract higher listing fees. I don't think there's nearly as much regulation in this space as there is with, say, TV or phone providers, so the merger may sail right through.
    28 Jul 2014, 12:59 PM Reply Like
  • th3decider
    , contributor
    Comments (405) | Send Message
     
    Great. Two companies with no profits join to become an even bigger company with twice as much losses.
    28 Jul 2014, 10:35 AM Reply Like
  • James Sands
    , contributor
    Comments (2426) | Send Message
     
    Trulia shareholders just got a "get out of jail" card......Zillow shareholders, not so much.
    28 Jul 2014, 10:47 AM Reply Like
  • 81george
    , contributor
    Comments (291) | Send Message
     
    Let's wait till they both report thier Q2 numbers. BTW when is the reporting date?
    28 Jul 2014, 12:39 PM Reply Like
  • 81george
    , contributor
    Comments (291) | Send Message
     
    Let's wait till they both report thier Q2 numbers. BTW when is the reporting date?
    28 Jul 2014, 12:39 PM Reply Like
  • dnguyen7078
    , contributor
    Comment (1) | Send Message
     
    TRLA Earnings Date Q2 report is on Jul 30, 2014 and Z is on Aug 05, 2014.
    29 Jul 2014, 01:38 AM Reply Like
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