Zillow Sued in Securities Class Action

A lawsuit filed in federal court on November 16 alleges Zillow illegally failed to disclose to shareholders that it was struggling to accurately predict home prices for its house-flipping business, which ultimately led the company to shutter the operation this month. The suit, filed on behalf of shareholder Dibakar Barua, alleges that “misstatements and/or omissions” by Zillow executives drove up Zillow share prices that later plummeted when the company announced it would shut down Zillow Offers.

Seattle-based Zillow said two weeks ago that it was shutting down Zillow Offers, the company’s attempt at iBuying, an algorithm-driven version of house-flipping. At the same time, Zillow said it would lay off a quarter of its staff. The company had thousands of homes it still needed to resell, many likely at a loss. Zillow reported a loss of $328 million in the third quarter, a loss of $1.29 per share. “Fundamentally, we have been unable to predict future pricing of homes to a level of accuracy that makes this a safe business to be in,” CEO Rich Barton said during an earnings call Nov. 2.  Zillow shares sank 23% the next day, closing at $65.86, down from more than $100 the previous week. Shares closed at $62.72 on Tuesday.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

Sign up to receive Class Actions Blog posts in your inbox!

Steve Larson

An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, environmental clean-up litigation, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve’s clients value his creative approach to resolving complex litigation matters.


Legal Disclaimer

The information contained in this blog does not constitute legal advice, and does not create an attorney-client relationship. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this blog.