NEW YORK, Jan. 15, 2022 (GLOBE NEWSWIRE) -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Zillow Group, Inc. (“Zillow” or the “Company”) (NASDAQ: Z, ZG) and reminds investors of the January 18, 2022 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you suffered losses exceeding $100,000 investing in Zillow stock or options between August 7, 2020 and November 2, 2021 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). You may also click here for additional information: https://www.faruqilaw.com/Z.
There is no cost or obligation to you.
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As detailed below, the lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) that, despite operational improvements, the Company experienced significant unpredictability in forecasting home prices for its Zillow Offers business; (2) that such unpredictability, as well as labor and supply shortages, led to a backlog of inventory; (3) that, as a result of the foregoing, the Company was reasonably likely to wind-down its Zillow Offers business, which would have a material adverse impact on its financial results; and (4) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On October 18, 2021, the Company announced that Zillow Offers suspended signing of new contracts through 2021 and would focus on its current inventory, citing “a backlog in renovations and operational capacity restraints.” Zillow claimed that “pausing new contracts will enable us to focus on sellers already under contract with us and our current home inventory.”
On this news, Zillow’s Class A share price fell $8.84, or 9.4%, to close at $85.46 per share on October 18, 2021, and Zillow’s Class C share price fell $8.97, or 9.4%, to close at $86.00 per share on October 18, 2021, on unusually heavy trading volume.
Then, on November 2, 2021, after the market closed, Zillow announced that it would wind-down Zillow Offers because “the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.” As a result, third quarter 2021 financial results included “a write-down of inventory of approximately $304 million within the Homes segment as a result of purchasing homes in Q3 at higher prices than the Company’s current estimates of future selling prices.” Moreover, the “Company further expects an additional $240 million to $265 million of losses to be recognized in Q4 primarily on homes it expects to purchase in Q4.” The “wind-down is expected to take several quarters and will include a reduction of Zillow’s workforce by approximately 25%.”
On this news, Zillow’s Class A share price fell $19.62, or 23%, to close at $65.86 per share on November 3, 2021, on unusually heavy trading volume. Zillow’s Class C share price fell $21.73, or 25%, to close at $65.47 per share on November 3, 2021, on unusually heavy trading volume.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Zillow’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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