Roughly a year after calling on CoStar Group to embark on a journey of “meaningful self-help,” the firm’s activist investors at Third Point Investors Ltd are back again pushing the Andy Florance-helmed firm to reform, including developing “strategic alternatives for Homes.com.”
In a letter addressed to CoStar Group’s board members published on Tuesday, Daniel Loeb, the CEO of Third Point, wrote that he and his firm maintain the same “dim view” of the firm’s strategy as they did a year ago and that this view is shared by other shareholders. Third Point said this view is underscored by CoStar’s “abysmal stock performance over the past five years, which saw the stock drop 27% compared to a 94% total return for the S&P 500.
“We thought then, as we do now, that the Company’s anemic performance can be ascribed entirely to the misallocation of billions of dollars into Homes.com, overseen by a feckless board of directors that has failed to protect shareholders from Mr. Florance’s quixotic quest while rewarding him with exorbitant pay packages,” Third Point wrote in its letter. “Like an elementary school child who wins a prize even for finishing last, Mr. Florance’s bonuses are perhaps the costliest ‘Participation Award’ our firm has witnessed.”
In an emailed statement from a CoStar spokesperson, “Over the past year, CoStar Group has conducted extensive engagement with stockholders to inform our updated strategic vision and capital allocation priorities – which have been unanimously approved by the board and Capital Allocation Committee including members nominated by Third Point and D.E. Shaw. We enter 2026 with considerable momentum and a clear plan to continue building our core platforms while scaling Homes.com, which is a critical component to our comprehensive digital real estate platform and next chapter of profitable growth.”
CoStar must consider “strategic alternatives for Homes.com”
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