By Dhirendra Tripathi
Investing.com – Zillow stock (NASDAQ:Z) stock climbed more than 8% Friday as the company secured its board’s approval to buy back $750 million of shares.
The repurchase will include Class A and Class C shares or a combination of both. Since the end of September, the shares have lost a third of their value.
The company’s update on its previously announced plan to wind down its home-flipping business, Zillow Offers, also lent momentum to the stock.
It said Zillow Offers has all the conditions in place to dispose more than 50% of the homes it expected to resell during the entire wind-down process.
With the wind-down progress, the company also updated its current-quarter homes segment revenue outlook to $2.6 billion at the midpoint of the guidance range from $1.9 billion earlier.
The decision to wind down the home-flipping operations came after Zillow Offers left a hole of around $381 million in the company’s third-quarter earnings. At the time of that announcement, the company said it would also lay off a quarter of its workers.
Zillow made a total net loss of $328 million in the September quarter, against a profit of $40 million in the same period last year.
The business suffered as Zillow tweaked its algorithms to grab share in a hot property market, overpaying for houses just when the prices were beginning to cool off. Having overpaid for houses earlier this year, it wrote down $304 million in the third quarter and expects another $265 million in write-downs in the current three-month period.