Sep. 22, 2014, 1:45 PM
- High-beta tech stocks are selling off hard as the Nasdaq registers a 1.3% decline. The selling is broad-based, with Internet, solar, and enterprise tech stocks all well-represented among the ranks of major decliners.
- Major Internet decliners: BIDU -4.7%. ANGI -7%. YELP -5.9%. AWAY -5.1%. CHGG -5.9%. GRUB -5.8%. P -5.2%. Z -4.6%. TRLA -4.8%. ATHM -7.9%. BITA -7%. DANG -5.9%. WB -5.3%.
- Solar: FSLR -4.5%. SCTY -7.5%. SPWR -4.5%. DQ -7.6%. JKS -5.5%. ASTI -6.3%. ENPH -5.5%. CSIQ -4.8%.
- Enterprise: WDAY -5.4%. GIMO -6.7%. VMEM -7.7%. IMPV -4.8%. MKTO -4.9%. SPRT -5.1%. CSOD -5.5%.
- Others: HIMX -4.6%. SIGM -5.6%. WATT -9.7%. CYNI -5.3%. ADNC -5.7%. PXLW -5%. SWIR -5.8%. MITK -6%. OCLR -6%.
Sep. 8, 2014, 5:35 PM
Sep. 8, 2014, 12:20 PM
- Though the title of Andrew Left's presentation tomorrow at the Value Investing Congress - "The Myth of Zulia" - has been known for over a week, it's as good of an excuse as any for today's downward slide in Zillow (Z -4.2%) and Trulia (TRLA -4.2%).
- Citron's original bearish report on Zillow was almost two years ago to the day. The stock's roughly a three-bagger since.
Sep. 5, 2014, 11:04 AM
- PAA Research reports Zillow (Z -2%) has made changes to its Featured Listings service for Premier Agent subs in an effort to boost growth.
- PAA, which has been bearish on Zillow for some time, thinks the changes could be a sign Zillow's ad inventory issues are growing as brokers try to exert more leverage.
- Merger partner Trulia (TRLA -1.6%) is also off. Zillow's display revenue rose 53% Y/Y in Q2 to $16.1M; Trulia's media revenue rose 41% to $10.9M.
- Previous: FTC wants more info from Zillow/Trulia
Sep. 3, 2014, 5:27 PM
- The FTC has made a second request for information from Zillow (NASDAQ:Z) and Trulia (NYSE:TRLA) regarding their planned merger. The companies say they're "gathering information to respond promptly to the second request."
- Though generally expected to be approved, the merger has caused some angst among real estate agents worried the combined entity will have too much market power.
- Zillow and Trulia have tried to soothe those concerns by promising their brands will stay independent, though ad services/marketing platforms will be integrated. The deal is expected to close in 2015.
Aug. 9, 2014, 8:55 AM
- The stocks of both Zillow (NASDAQ:Z) and Trulia (NYSE:TRLA) have already fallen about 15% since their merger deal - dubbed Godzulia by the bulls - was announced, writes Bill Alpert, perhaps reflecting worry their "heft might be computer-generated imagery."
- Though the market cap of the companies nearly equals the marketing budget for all U.S. realtors, they have yet to monetize much of their hefty Web traffic, and while bulls like to think their combo will make for an advertising "must buy," the two have both been quietly offering deep discount to chains like Realogy (NYSE:RLGY), suggesting any thesis about pricing power may need to be rethought. "We have the audience," says Zillow boss Spencer Rascoff in response. "Eventually, the advertising dollars will follow the audience."
- There's no doubting impressive growth in traffic. From a few million monthly visitors in 2008, Zillow's traffic rose to 25M browsing from desktops and another 28M from mobile devices in June. Revenues have grown nicely as well, but not at as fast a pace as traffic, and earnings have been even harder to come by - at least if you count expenses the way GAAP does. "Clearly, there's still work to be done because Zillow and Trulia haven't proved yet that they can grow their Web traffic and ad sales profitably."
Aug. 6, 2014, 9:14 AM
Aug. 5, 2014, 6:30 PM
- Zillow (NASDAQ:Z) expects Q3 revenue of $87M-$88M and full-year revenue of $321M-$323M, above consensus estimates of $82.6M and $310.8M. Full-year adjusted EBITDA guidance has been hiked by $4M to $52M-$54M.
- The figures don't assume any revenue from the Trulia (NYSE:TRLA) merger, which is expected to close in 2015.
- Q2 Marketplace revenue +72% Y/Y to $78.7M, an even growth rate with Q1. Within the segment, real estate revenue rose 83% to $56.1M, and mortgages revenue 13% to $6.6M.
- Display (ad) revenue +53% Y/Y to $16.1M, after growing 62% in Q1.
- Premier Agent subs rose by 3,850 Q/Q to 56.8K; 4,654 were added in Q1. ARPU rose to $320 from $286 in Q1 and $266 a year ago. Monthly unique users rose 49% to 81.1M, and mobile visits nearly doubled.
- With marketing and R&D spend remaining aggressive, GAAP costs/expenses rose 56% Y/Y to $89.4M. Sales/marketing spend made up $48.1M of the total.
- Zillow is nearly unchanged AH. Trulia is up 1.1%.
- Q2 results, PR
Aug. 5, 2014, 4:34 PM
Jul. 31, 2014, 4:16 PM
Jul. 28, 2014, 12:47 PM
- 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
Jul. 28, 2014, 12:45 PM
Jul. 28, 2014, 9:12 AM
Jul. 28, 2014, 8:37 AM
- 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
Jul. 25, 2014, 1:53 PM
- "It's a blockbuster ... What this says is, Zillow has been and has locked up the absolute dominant position in online real estate in the United States,” says real estate analyst Steve Murray on reports Zillow (Z +4.6%) is looking to acquire Trulia (TRLA +2%).
- Barclays' Christopher Merwin predicts a merger would "dramatically increase the combined entity's pricing power" with real estate agents, and would yield more leverage in price negotiations with MLSs. Zillow just bought MLS data-integration software platform provider Retsly.
- Murray admits there could be a backlash to the deal, stating "the industry will be concerned ... if you have one huge, overwhelmingly dominant player" for whom agents "will be almost compelled" to list on.
- Bloomberg reports Zillow could pay for 1/3 of the purchase in cash (implies a $667M cash payment at a $2B acquisition price), and 2/3 in stock. Zillow had $446M in cash/investments at the end of Q1.
- While Zillow and Trulia continue to rally, Move (MOVE -2.8%) is now below where it traded before the first merger report broke.
Jul. 24, 2014, 2:23 PM
- 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
Z vs. ETF Alternatives
Zillow Group Incoperates the real estate and home-related information marketplaces on mobile and the Web, with a complementary portfolio of brands and products to help people find vital information about homes and connect with local professionals.
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