Spruce Point takes short position in Zillow
Business
Spruce Point takes short position in Zillow
(Reuters) - Investment management firm Spruce Point on Tuesday disclosed a short position in real estate firm Zillow (ZG.O) stating that its core business model has come under pressure from declining web traffic as high mortgage rates dampen demand for homes.
The company, whose website is popular among homebuyers, may face up to 40-60% downside risk or about $23-$35 per share.
Zillow did not immediately respond to a Reuters request for comment.
The ongoing litigation against the National Association of Realtors (NAR) and other home brokerages for artificially inflating real estate commissions will have a "significant impact" on Zillow's business, Spruce Point said in the report.
The dispute could prevent home sellers from paying both the listing and buyer agent commission, which could reduce agents' revenue and force them to spend less on Zillow, it added.
