Zillow seeks $1.1B cash infusion

The senior note offerings come as the company is growing its iBuying and mortgage businesses

National /
Sep.September 05, 2019 12:47 PM
Zillow CEO Richard Barton (Credit: iStock)

Zillow CEO Richard Barton (Credit: iStock)

Zillow Group is seeking more than $1 billion in cash amid its “bold expansion.”

The company announced earlier this week two offerings of convertible senior notes — a $600 million offering due in 2024 with a fixed interest rate of 0.75 percent and a $500 million offering due in 2026 at a fixed rate of 1.375 percent, Inman reported. The sale is expected to close on September 9. When the notes mature, the company will repay investors in cash or shares of its Class C capital stock.

In a release, Zillow said it would be using the cash injection for “general corporate purposes,” which could include “working capital, sales and marketing activities, general and administrative matters and capital expenditures.”

On the company’s last earnings call, CEO Rich Barton compared Zillow’s bet on its instant homebuying service, Zillow Offers, and mortgage business to a “moon landing.” Both bets drove revenue in the second quarter and the CEO said it was evidence of the “early stages of a bold expansion” of Zillow. Based on second quarter results, Barton said Zillow Offers was on track to hit an annualized run rate of $1 billion in revenue.

The week before, portfolio manager Steve Eisman, who famously shorted the subprime market, said Zillow is one of his largest short positions. He told The Real Deal that he believed the company has run out of ideas. He described Zillow’s mortgage and iBuying businesses as proof that their “basic business” of making money off its traditional listings platform “was faltering or slowing.”

“In a recession, you’re going to get your head handed to you,” he said. [Inman] — Erin Hudson


Related Articles

arrow_forward_ios
Zillow COO Jeremy Wacksman (Zillow, iStock)
Zillow using Zestimate to streamline cash offers for some homes
Zillow using Zestimate to streamline cash offers for some homes
Susan Daimler, Zillow COO Jeremy Wacksman (left) and CEO Rich Barton. (Zillow, Getty)
Zillow taps Susan Daimler as president
Zillow taps Susan Daimler as president
CoStar Group Andrew C. Florance. (Getty)
CoStar revenue soars 19% after year of acquisitions
CoStar revenue soars 19% after year of acquisitions
Zillow CEO Rich Barton (Getty, iStock/Photo illustration by Kevin Rebong for The Real Deal)
Zillow buys ShowingTime for $500M
Zillow buys ShowingTime for $500M
Zillow CEO Rich Barton (Illustration by The Real Deal)
Zillow is now charging for rental listings
Zillow is now charging for rental listings
From left: PLS founders David Parnes, Mauricio Umansky, James Harris and Chris Dyson and (The Agency RE)
Pocket listing service is back with a new website
Pocket listing service is back with a new website
CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)
FTC approves CoStar’s $250M Homesnap acquisition
FTC approves CoStar’s $250M Homesnap acquisition
(Credit: iStock)
Gimme squatter: When iBuying homes draw unwanted attention
Gimme squatter: When iBuying homes draw unwanted attention
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...