The litigation challenges Defendants’ statements concerning the Zillow Offers business, which buys and sells homes directly in dozens of markets across the country and allows sellers control over their timeline.
The Complaint alleges that Defendants falsely touted the durability and acceleration of the company’s “burgeoning sell-side business, Zillow Offers” and improvements to its pricing models. At the same time, Defendants concealed from investors that (1) Zillow faced significant unpredictability in forecasting home prices for its Zillow Offers business, (2) the unpredictability, as well as labor and supply shortages, led to a backlog of inventory, and (3) as a result, Zillow was reasonably likely to wind down the Zillow Offers business.
Investors began to learn the truth on Oct. 18, 2021, when Zillow announced that due to a backlog in renovations and operational capacity constraints, the Zillow Offers business will not sign any new additional contracts to buy homes through the end of 2021.
Then, on Nov. 2, 2021, Zillow announced that due to unpredictability in forecasting home prices, the company is winding down the Zillow Offers business, slashing its workforce by 25%, and incurring a whopping $304 million write-down on housing inventory purchased during Q3 2021. The company also said it expects to incur a $240 to $265 million loss on homes it expects to purchase in Q4 2021.
These events sent the price of Zillow shares crashing lower.
Hagens Berman filed a robust complaint detailing Defendants' falling behind its internal home purchasing volume targets and launching a risky business initiative the company hid from investors.
CASE TIMELINE
Hagens Berman filed a robust complaint detailing Defendants' falling behind its internal home purchasing volume targets and launching a risky business initiative the company hid from investors.
