Seeking Alpha

Zillow/Trulia predict major cost savings, other synergies

  • Zillow's (Z -1.5%) purchase of Trulia (TRLA +13.3%) signals Zillow plans to create a portfolio of online real estate assets much as InterActiveCorp has created a portfolio of online dating assets, says CEO Spencer Rascoff. "What's taking shape is the creation of a real estate media company." Move (MOVE +8.9%) investors might be pleased to hear that.
  • Though Trulia's brand will stay independent, Zillow and Trulia predict the deal will yield at least $100M/year in cost savings by 2016. Other expected synergies include: 1) Better real estate data for consumers thanks to data-sharing between Zillow/Trulia. 2) Common ad services/marketing platforms that can yield a better ROI. 3) Broader listing distribution.
  • The companies note they still only account for 4% of estimated U.S. real estate marketing spend of $12B/year. Zillow has 83M monthly unique users, and Trulia 54M (some overlap exists).
  • Street commentary has been quite positive. Macquarie: "This could pave the way to these companies becoming more profitable more quickly." CRT Capital: "At the end of the day, this provides scale. And scale ultimately leads to more advertising on the overall network."
  • Prior Zillow/Trulia coverage
Comments (12)
  • yliu54
    , contributor
    Comments (171) | Send Message
     
    A company, doubled its market cap in a year by losing money, currently trading at about 30 P/S, is buying another terrible company, with 70%+ premium.

     

    Funny things are happening everywhere while our amazing Fed injected, and is injecting easy money into the market.
    28 Jul 2014, 01:18 PM Reply Like
  • 81george
    , contributor
    Comments (289) | Send Message
     
    yliu54:
    Not for long my friend, not for long. I just shorted 10K Z at 164.3-164.5 and believe me I intent to hold it until I see 100 in one year time, or less. Z sucks no matter what dumb analysts say. Let's wait until they report Q2.
    28 Jul 2014, 02:58 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4273) | Send Message
     
    81george: you just shorted $1.6 million worth of shares? Don't you think that is a bit risky? Gutsiest move ever

     

    what is your exit strategy? If it goes against you, at what price will you finally cover?
    28 Jul 2014, 04:16 PM Reply Like
  • buyandhold???
    , contributor
    Comments (907) | Send Message
     
    so you shorted $1.64M of stock and you think the company "sucks" and "dumb analysts" are to blame? I too think Z is overvalued but i tend to think by your eloquent nature that you're probably 16 and playing around on the internet this summer home from school with nothing to do. Retail investors typically don't hold $1.6M short positions, and I'm a guy with an 8 figure portfolio who was a former trader. That is why I think you're not telling the truth....my largest position is $300k tops....ever.
    28 Jul 2014, 03:52 PM Reply Like
  • 81george
    , contributor
    Comments (289) | Send Message
     
    Buyandhold, I have posts with exact trades I made. Most of them shorts, as a hedge to my longs. All trades - when opened and when closed. Please read them: TRLA, Z, YNDX, QIWI, TWTR, YELP, NMBL. Some traders were deriding me when I was loosing, just as you just did, eventually going silent, when I would cover at the price I first had in mind as a target.
    At some point some of the positions were loosing money, but ALL of them were closed at the price I targeted. All posts are very transparent and dated accordingly. Honestly, I don't care what you think. I just sometimes entertain myself playing devil's advocate. 16 yo? I wish I was, I would have then become a medical doctor, or a teacher. The two most noble professions.

     

    Mark Kreiger, I will cover my potential loss, once it erodes 10% of my profits I made in 2014.
    How much? I will leave it to your knowledge of simple arithmetics. Read my posta beginning jan 2014. The only stock I was wrong with was DDD, though I first made 1 million in 3 days, after bounce from 55 dip, then I bought again at 58 and still holding it.
    This is it, folks, all I have to say.
    28 Jul 2014, 09:13 PM Reply Like
  • buyandhold???
    , contributor
    Comments (907) | Send Message
     
    ok buddy, we're all really impressed congratulations. You either have $50M in your portfolio or you are a fool. I have well north of $10M in my portfolio and i don't hold more than 3-4% in any single position but what would I know about trading, its not like i was a trader or anything......
    28 Jul 2014, 09:20 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4273) | Send Message
     
    dumb question..but here it is..TRLA shareholders get .444 shares of Zillow for exchange of each of their TRLA shares. There are approx. 37 million shares of TRLA shares outstanding..so (.444) (37m) =16.4 million shares of Zillow stock they will be entitled to...if you take the current price of about $160 per share of Z multiplied by 16.4 m , you get about $2.6 billion?

     

    The deal is for $3.5 billion...what about the other $900 million?
    28 Jul 2014, 10:14 PM Reply Like
  • tungle7
    , contributor
    Comments (21) | Send Message
     
    Z will go up to $213.4/share which will make $3.5 billion.
    28 Jul 2014, 10:24 PM Reply Like
  • Atlanta Equity Professional
    , contributor
    Comments (24) | Send Message
     
    Secondary offering, Mark? I'm sure they've got a plan. Stock would probably rally if they were to announce a secondary (I'm being serious).
    28 Jul 2014, 10:31 PM Reply Like
  • 81george
    , contributor
    Comments (289) | Send Message
     
    Buyandhold. I made my first 50 million when I was 26years old back in 1991-1994 in Mother Russia buying Gazprom, Surgutneftegaz, Niznevartovsk negategaz vauchers ( given to their employees during initial privatization, later they became shares) paying by bottles of vodka. Discussions are over. Cheers. До Свиданья!
    28 Jul 2014, 11:26 PM Reply Like
  • IncomeYield
    , contributor
    Comments (2305) | Send Message
     
    Now that a "modest" home is around a million dollars in many parts of the US, a 5 to 6% commish is a big bite.

     

    This has to give at some point.

     

    Someone needs to offer the FSBO the equivalent of E&O insurance.
    29 Jul 2014, 12:36 AM Reply Like
  • 81george
    , contributor
    Comments (289) | Send Message
     
    Dear Buyandhold,
    I promised total transparency in my actions. I couldn't resist and I covered last night AH, greed got the worst side of me. :)
    Now, call me a fool, I am raising my ante, next short of Z will be 20,000 shares at 165 + -. If it ever gets there. I still believe in PT of 100 in the long run.
    6 Aug 2014, 12:48 AM Reply Like
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