As I’m sure you all have heard by now, Zillow has gone public this morning and at least the first day’s worth of trading has been beyond anyone’s wildest expectations. Zillow priced its offering at $20 per share, way above the original $12-14 range, and in immediate trading, the stock went as high as $60. It is unknown where it will settle, but… that’s now a game for Wall Street traders.
I did have a quick question for y’all, though, because some of you are really smart folks in the real estate industry. This paragraph from GigaOM:
And all this from a company that has yet to turn a profit. Zillow made nearly $30.5 million in revenue in 2010, but ultimately posted a net loss of about $6.8 million for the year, according to regulatory filings. Ostensibly, the $70 million Zillow made in Wednesday morning’s IPO will be put toward initiatives that will boost the business’ bottom line.
So… what initiatives was Zillow unable to do in the past to boost the bottom line that it will now be able to do with an extra $70 million in funding? How do you think Spencer and team will spend that money to improve profitability?
Marketing? Technology? More salespeople? What would Zillow have to do to become more valuable/extract more money from the real estate broker/agent?
Speculate away! I doubt we’ll get authoritative answers from anyone at NASDAQ: Z since those are forward-looking statements. 🙂 I’m curious what the community thinks these initiatives will be.