Zillow Group’s stock has dropped more than 30 percent in the last two weeks, but co-founder Rich Barton is betting big on the online real estate company’s future.
Barton purchased close to 700,000 shares of Zillow stock on the open market over the last few days, valued at more than $19.2 million combined. This is the first time Barton has bought stock on the open market, Zillow representatives confirmed.
Barton was already the top shareholder in Zillow, according to its most recent proxy statement with the U.S. Securities and Exchange Commission. The co-creator of Expedia — who founded Zillow in 2004 with Lloyd Frink — held six percent of class A shares; six percent of class C shares; and 61 percent of class B shares.
Now, with the latest purchases, he is doubling down on the company.
“All the work the great people of Zillow Group have done to date, bringing critical real estate market information to light, has set the stage for Act II: transforming the way consumers buy, sell, mortgage, and rent homes,” Barton said in a statement. “I’m proud to be a Zillow Group board member and shareholder. I couldn’t be more excited about the opportunity in front of us and am committed to the company’s long term vision and success.”
Barton picked up the additional shares at prices ranging from $26-$28, and the purchase could help juice a stock in decline. Two weeks ago, Zillow’s stock traded at about $40 per share.
Zillow stock has dropped more than 52 percent since early August, partly due to investor fears of a declining real estate market. The company makes money by selling tools and advertising to real estate agents, helping them drive more quality leads.
The stock market’s swoon in recent weeks impacted Zillow, with the stock hammered after reporting its most recent quarterly financials. The stock dropped 20 percent in after-hours trading that day, as Zillow just missed expectations for revenue and its guidance for the fourth quarter came in below analyst expectations.
Zillow’s Wall Street slide comes as the company is expanding its home-buying and selling operation, Zillow Offers. Zillow reported $11 million in revenue from the new business, which launched earlier this year. It purchased 168 homes and sold 36 homes through Zillow Offers in the third quarter. The company took a $16 million loss for the Homes segment last quarter before income taxes.