Zillow Group, Inc. (Z, ZG) Securities Fraud Class Action:
The litigation challenges Defendants’ statements concerning the Zillow Offers business, which buys and sells homes directly in dozens of markets across the country and allows sellers control over their timeline.
The Complaint alleges that Defendants falsely touted the durability and acceleration of the company’s “burgeoning sell-side business, Zillow Offers” and improvements to its pricing models. At the same time, Defendants concealed from investors that (1) Zillow faced significant unpredictability in forecasting home prices for its Zillow Offers business, (2) the unpredictability, as well as labor and supply shortages, led to a backlog of inventory, and (3) as a result, Zillow was reasonably likely to wind down the Zillow Offers business.
Investors began to learn the truth on Oct. 18, 2021, when Zillow announced that due to a backlog in renovations and operational capacity constraints, the Zillow Offers business will not sign any new additional contracts to buy homes through the end of 2021.
Then, on Nov. 2, 2021, Zillow announced that due to unpredictability in forecasting home prices, the company is winding down the Zillow Offers business, slashing its workforce by 25%, and incurring a whopping $304 million write-down on housing inventory purchased during Q3 2021. The company also said it expects to incur a $240 to $265 million loss on homes it expects to purchase in Q4 2021.
These events sent the price of Zillow shares crashing lower.
“We’re focused on investors’ losses and proving Zillow lied about the efficacy of its pricing models and the value of its inventory,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you invested in Zillow and have significant losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding Zillow should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
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Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP