A day after Ritholtz Wealth Management’s Josh Brown said Zillow Group Inc (NASDAQ: Z) was in a well-defined downtrend and could see a further decline, he took a position in the online real estate marketplace, citing a 55% drawdown from the year-to-date high in mid-February.
“I’ve been stalking it since $120. It’s still a falling knife but is cheap enough for me now, so I’ve bought about a third of what I ultimately want to own,†Brown said on CNBC’s “Halftime Reportâ€.
Brown warns the stock could slide further
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Brown fixated on how the prospect for the stock to fall further remained on the table and that he would buy more in such an event. According to the Ritholtz CEO, he is particularly excited about the Washington-based company’s iBuyer services.
“iBuyer is a bigger business that could eventually take over this whole company. The business has the potential to be explosive when you consider how much people hate the process of selling a house. They are not the only player doing it, but they are the biggest and can be the best.†he added.
Shares of the $24 billion company are up more than 3.0% on the intraday chart.
Zillow bought a record 3,800 homes last quarter
Zillow’s iBuyer services streamline the process of selling a house for its users. All they have to do is insert the address, answer a few questions, and get an instant offer from Zillow. The Nasdaq-listed firm bought a record 3,800 homes last quarter.
Brown highlighted that Zillow started as a platform that sold leads to realtors. It then got involved in transactions to establish a mortgage business of its own. And now it has penetrated the iBuying services.
“I love what the strategy is transforming this company into, and that’s why I wanted to get into the stock,†he commented.
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