Shares of online home sales site Zillow (NASDAQ: Z) drooped hours Tuesday after the company announced revenue that was shy of expectation and plans to acquire a national mortgage lender to assist with home purchases.
Shares plunged more than 16% in extended trading Monday to below $50 after being halted for the acquisition announcement.
The company reported revenue of $325 million for the quarter, just shy of consensus estimates of $326 million. The company reported a loss of two cents per share.
The company recently launched a new strategy of buying and selling homes directly to users, expanding its offerings beyond real estate brokers. The acquisition is intended to supplement that effort, the company said.
Shares took a similar beating in April when the company first announced the strategy. But CEO Spencer Rascoff maintained in May the strategy would pay off.
In the second quarter of 2018, Zillow Group began reporting financial results for its two reportable segments: the Internet, Media & Technology (“IMT”) segment and the Homes segment. The IMT segment includes the financial results for the Premier Agent, Rentals, Mortgages and new construction marketplaces, dotloop, and display, as well as revenue from the sale of various other marketing and business products and services to real estate professionals. The Homes segment includes the financial results from Zillow Group’s buying and selling of homes directly.
As of Monday's close, the stock had gained nearly 30% in the last 12 months and 45% in 2018. The stock opened Tuesday down $10.42, or 17.7%, to $48.58
