On Monday, with the housing market cooling and Douglas Elliman’s stock down 63 percent for the year, CEO Howard Lorber made a show of faith — and, so far, a tidy profit.
The executive bought 100,000 of his brokerage’s shares at $3.99 a pop, according to SEC filings. The share price has since risen by 16 percent.
The stock purchase was Lorber’s first this year and the largest by dollar amount from someone at the firm in the past three months, according to Simply Wall St., a company that tracks stock transactions. New York-based broker Michael Leibowitz also purchased 100,000 shares over the past week, paying slightly less than Lorber.
The share price on Monday hit an all-time low of $3.83 but was trading at more than $4.60 Thursday afternoon. Its 52-week high is $12.66.
A Douglas Elliman spokesperson declined to comment on why Lorber opened up his wallet, but one analyst said his motivations could be multi-faceted.
“It’s most likely a convergence of factors: He obviously believes in the company, so he’s buying on the dip,” said David Friedman, co-founder of the wealth intelligence platform WealthQuotient. “But there’s also a strong signal to the troops.”
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That is, Lorber’s purchase could be an effort to boost the morale of Elliman agents and employees buffeted by a year of headwinds and deteriorating market conditions. With mortgage rates up and inventory down, home sales have slowed to a proverbial crawl.
Also, Elliman lost Tal and Oren Alexander, two of its top brokers, to competitor Side. And Brad Loe and Steven James, two former Elliman executives who now work for Berkshire Hathaway, have been poaching brokers since the spring.
Lorber’s purchase could also be an effort to portray confidence to investors, regardless of his actual read on market conditions. Whatever the intentions, the stock has rallied since.
Lorber is the company’s fifth largest stakeholder, according to Simply Wall Street. Monday’s purchase gives him just under a 5.2 percent ownership stake, making him the second largest individual shareholder.
Billionaire Phillip Frost is Elliman’s largest individual shareholder and third largest overall with just under 8.8 percent ownership. Rounding out the top five are Vanguard, BlackRock and Capital Research and Management.
Lorber has some money to throw around: His purchase Monday represented just 1.25 percent of his compensation last year. His salary was $3.4 million, but his earnings totaled more than $32 million after bonuses and $21.5 million in stock awards. That’s roughly 10 percent of Elliman’s $366 million market cap.