"Typically we see companies in our industry sell off businesses because they no longer fit within their business model or because they need to raise capital, Steve Murray, the co-founder of RTC Consulting, said. According to Murray, while companies could do things like sell off more shares or borrow money to generate needed capital, sometimes selling an asset makes more sense for their overall strategy and their balance sheet."
"Over at Keefe Bruyette & Woods, two of the firm's analysts Ryan Tomasello and Jade Rahmani noted in a report that despite investor pressure, the shared infrastructure and broader interconnectivity between Homes.com and CoStar's other businesses would complicate and cause friction with the feasibility of divesting Homes.com or its other residential real estate operations. We agree that the earnings drag from Homes.com and CoStar's other residential investments has been a meaningful overhang on [CoStar Group's] shares,"
Companies sell businesses when assets no longer fit their business model or when capital is needed. Selling an asset can be preferable to issuing more shares or borrowing to support strategy and the balance sheet. Fathom Holdings sold Dagley Insurance to its original founder Nathan Dagley in 2024 for $15 million, with proceeds intended to strengthen the company's financial position and support growth initiatives. Zillow exited iBuying in November 2021 amid investor concerns about earnings and balance-sheet volatility. Homes.com and other residential investments demand attention and capital, and shared infrastructure complicates potential divestiture, creating an earnings overhang on CoStar shares.
Read at www.housingwire.com
Unable to calculate read time
Collection
[
|
...
]