What happened
Shares of online real estate platform Zillow (Z +4.35%) (ZG +4.11%) popped on Monday, rising as much as 11.3%. As of 9:41 a.m. EST, the stock was up 9.8%.
The stock's rise follows a statement from Zillow co-founder and executive chairman Rich Barton about his recent decision to buy millions of dollars' worth of the company's stock. Barton has been buying up shares of the company after they fell sharply amid a sell-off of tech stocks and a post-earnings drop when the company provided fourth-quarter revenue guidance well below what management was expecting.
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So what
Between Nov. 16 and Nov. 20, Barton spent $19.2 million buying the company's class C (stock symbol "Z") and class A (stock symbol "ZG") shares.
In a statement to Barron's, Barton said:
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. 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.
Now what
Barton's statement, backed by his money, is good news for investors as the company undergoes a transformational period in which it is getting into the business of buying and selling homes directly with customers.
Efforts to transform its business model have weighed on near-term results and the company's fourth-quarter guidance, but Zillow CEO Spencer Rascoff said in the company's third-quarter earnings release that he believes these changes will have a positive effect over the long term. "It will take time for advertisers to adapt to these changes, but we are confident that they set us up for long-term growth," said Rascoff in the company's third-quarter earnings release.
