A class action lawsuit has been filed against the Seattle-based Zillow Group, claiming potential securities law violations.
Founded in 2006, Zillow is an online real estate marketplace company with annual revenues of around $3 billion.
Those revenues are largely realized by selling advertising on its website. Some three years ago the company began purchasing homes through its division Zillow Offers on the theory it could leverage its pricing data by flipping houses on a large-scale basis.
As of earlier this month, Zillow had acquired more than 7,000 homes. But last week Rich Barton, chief executive officer of Zillow, said the company would cease such purchases, selling its current inventory in the process.
Now a Boston-based law firm, Block & Leviton, has announced a class action suit against the company, asking investors who purchased shares in Zillow and subsequently lost money to contact the firm.
In a press release, Block & Leviton noted that Zillow had earlier said its house flipping venture could attract up to $20 billion on an annual basis, but that since the company announced its decision to close Zillow Offers, shares of stock in the company had dropped by 15%.
“Anyone who purchased Zillow Group, Inc. stock between February 10, 2021 and November 2, 2021 is potentially eligible,” the Block & Leviton announcement says, “whether or not they have sold their investment.”
The Block & Leviton action is one of several lawsuits being filed against Zillow for its Zillow Offers decision.
Despite the fallout from its Zillow Offers action, Zillow remains not only a potent real estate market site, but also an active news service, with recent stories exploring the popularity of earth tones as a home trend in 2022, seasonal shifts in home buying, and the growth of pet owners in the home buying market.
By Garry Boulard