Zillow’s stock bounced back to the highest level in a month as the portal announced a stock buyback plan and its speedy progress on sunsetting Zillow Offers.

Zillow’s stock market fortunes are on the rebound after the real estate giant significantly reduced its Zillow Offers inventory and began buying back $750 million of its own Class A common stock and Class C capital stock.

The portal’s stock jumped 8 percent to $58.67 per share at market open on Friday following news that half of its Zillow Offers portfolio was in the process of being unloaded. It also benefited from an upgraded fourth-quarter outlook that boosted the Homes segment revenue 38 percent to $2.9 billion. However, according to Bloomberg, Zillow’s stock is still down 60 percent year-to-date.

“We are pleased with the progress of our wind-down efforts and recognize that no longer operating Zillow Offers will allow us to have a more capital-efficient balance sheet and business moving forward,” said Zillow Group co-founder and CEO Rich Barton in a statement on Thursday. “With that, we see today as an opportune time to announce a share repurchase program and reduce the cash balance we built up to support Zillow Offers.”

Even with this small victory in the books, Zillow still has a long and potentially difficult road to shutting Zillow Offers’ doors for good.

Based on figures from two previous Inman articles, Zillow should have approximately 8,800 homes left to sell. The portal had 9,790 homes in its inventory at the end of September, with contracts to purchase another 8,172 homes. However, the portal has canceled 400 homeowners’ contracts over the past several weeks, whittling  Zillow’s available housing stock down to at least 8,781 homes.

In addition to the blowback surrounding contract cancellations, the company is juggling multiple securities fraud lawsuits and facing scrutiny over selling large swaths of its stock to institutional investors, namely New York City-based Pretium Partners who have been under fire for poor property management and alleged predatory behavior.

Zillow spokespeople have reiterated their confidence in the wind-down process to Inman several times, saying they’re doing their best to serve  homeowners, homesellers, homebuyers and employees who will be impacted by the iBuyers’ closure.

“We are pleased with the significant Zillow Offers inventory wind-down progress we’ve made in such a short time,” Zillow Group CFO Allen Parker told Inman on Thursday. “We will continue to be disciplined in our inventory wind-down strategy and evaluate a variety of options to best optimize net cash flows to the company.”

“The company continues to expect the net impact of the Zillow Offers wind-down of inventory (including inventory losses), operating costs, and restructuring costs in the aggregate, to be at least cash-flow neutral, including after repaying all Zillow Offers secured debt, which was $2.9 billion as of Sept. 30, 2021,” Parker added.

Whether Zillow’s stock buy-back plan and breakneck Zillow Offers progress will be the solution it needs to bounce back to 2020 levels has yet to be seen. However, a previous Inman article explained Zillow’s stock buy-backs are a commonly-used strategy to lift struggling stock values and improve a company’s earnings per share ratio.

Email Marian McPherson

Zillow
Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Keep up-to-date on tools and tactics to impress your clients and outshine your competition with the 2022 virtual bundle.Register Now×
Agent Appreciation Sale: Inman Select for only $85.CLAIM OFFER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription