Real-Estate

Zillow Halfway Through Selling iBuyer Inventory

Rich Barton, chief executive officer, Zillow (Getty Images, iStock)

Zillow’s disastrous foray into iBuying may finally provide a silver lining to investors.

The company’s shares jumped on Friday, a day after the company said it has signed contracts to sell more than half the homes it picked up through Zillow Offers, the iBuying unit that it was forced to shutter last month. Zillow also said it will buy back $750 million of its stock and raised its fourth-quarter revenue estimate for the unit that includes iBuying by more than a third.

Zillow Offers was on the hook to sell close to 18,000 homes at the end of the third quarter, 9,790 of them in its inventory and another 8,172 in contract. It’s unclear how many homes it owns now because Zillow has scrapped at least 400 contracts despite earlier promises to honor those agreements.

The company said it’s selling homes through bulk deals with institutional investors, such as Pretium Partners, which agreed to buy 2,000 properties, as well as deals with individual homebuyers. Zillow raised its fourth-quarter estimate for the homes unit to a range of $2.3 billion to $2.9 billion from $1.7 billion to $2.1 billion.

Zillow said it expects the closure of iBuying to be “cash-flow neutral” considering its inventory, operating and restructuring costs and Zillow Offers’ $2.9 billion in secured debt.

Still, with more cash than expected coming in, CEO Rich Barton said it was “an opportune time” to say it will repurchase $750 million of Class A and C shares. The buyback will let the company “reduce the cash balance we built up to support Zillow Offers,” said Barton in a statement.

Zillow shares tumbled 43 percent in the past two months as the company paused and then shut down Zillow Offers. Shareholders have filed at least two lawsuits seeking class action status, accusing Zillow of misleading investors.

The stock was up 7.3 percent at $58.21 as of 11:15 a.m. in New York.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button