- Spruce Point is short Zillow stock, according to a new report
- Short seller alleges that lawsuits, competition threaten firm
Zillow Group Inc. shares fell after short seller Spruce Point Capital Management said it was betting against the stock and highlighted challenges facing the company, including antitrust litigation targeting broker commissions in the US housing industry.
Spruce Point, founded by Ben Axler, said that shares could fall by 40% to 60% over the long term, arguing that the company’s core business model of selling marketing services to real estate agents is under pressure from multiple directions, according to a report released Tuesday. Lawsuits targeting how agents are compensated threatens to “dramatically” impact Zillow’s customer base, the report said.
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