To all the agents in the house,
We can debate how much a company's stock price matters, but the total lack of investor confidence in real estate brokerages, iBuyers, and listing websites of late is pretty astounding. Some lowlights, with the most recent numbers from Friday:
* Redfin stock traded at around $72 a share a year ago. It is now about $21 a share, for a market capitalization (share price multiplied by all the shares) of $2.3 billion.
* Opendoor stock traded at $28 a share a year ago. Like Redfin, share price has fallen more than 300% since. The stock was trading at $9 Friday, which represents a rebound from a February nadir of less than $7. Opendoor had a market value Friday of $5.2 billion.
* Zillow, as amply documented, has also seen a stock freefall, from $135 a year ago to $55 today, for a $12.4 billion market cap.
* Compass became a publicly traded company at the start of April last year, with a share of stock selling for over $20. Today, it's less than $7, with a market cap of just over $3 billion.
* Now things get interesting. All the above companies did not make a profit in 2021. But eXp did, which apparently is less important to people who buy and sell stocks than it is to me. The brokerage's shares have gone from $51 a year ago to $26 today, with a market cap of $3.8 billion.
* iBuyer Offerpad's stock debuted in September at $10 a share, before sinking, and then slightly rebounding after an annual report that showed profitability. The company's stock is now at over $5 a share, with a market cap of $1.2 billion.
* The one exception to tumbling stock prices is Realogy, whose share price has gone from $16 to $17 in the past year, for a market cap of $2 billion. The mostly stagnant price, though, comes as the company turned itself around from losing $360 million in 2020 to making $343 million in 2021.
These trend lines were all happening before Freddie Mac announced Thursday that the average rate on a 30-year mortgage is now well over 4% and the National Association of Realtors reported Friday that total existing home sales were down in February from both a month ago and a year ago.
Going public helped companies like Redfin, Opendoor and Compass raise a significant, though perhaps not transformative, amount of money. But now it puts them in the public crosshairs where dour reporters like myself can authoritatively write they are losing money, any member of the public can track their declining stock price, and any decisions they make to re-navigate their money-losing ship will be immediately judged by shareholders. This is not an enviable position. I wonder if Keller Williams and Side are monitoring this, and deciding to indefinitely hold off on their much rumored initial public offerings (At the same time, HomeSmart looks to be moving forward with going public).
Agents, I am very curious about your thoughts. Do you care if your company is public, and what its stock shares are? Could these numbers even give you confidence, or doubt, about what brokerage to join?
Please send me your thoughts to mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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