Stock of the day: Zillow

The consumer real estate website announces an acquisition, causing more fluctuation in this volatile stock.

By Motley Fool Aug 19, 2013 2:55PM
Consumer real estate website Zillow (Z) came out with a couple of announcements Monday. The first was its upcoming acquisition of the New York City real estate website Street Easy, at a price of $50 million. Zillow also announced that it has applied to sell an additional 2.5 million shares on the market.

In this video, Motley Fool financial analyst David Hanson tells investors that he likes the acquisition. Zillow's business model is focused on the real estate agents, and acquiring other websites allows them to gain more consumer traffic, and offer more value to the real estate agents looking to have their properties seen.

copyright Digital Vision LtdDavid also says that while share dilution isn't ever something shareholders are excited to see, he thinks that after Zillow's amazing share price run-up -- up over 200% just in 2013 alone -- this move definitely makes sense. It will take advantage of the company's position on the market to raise a substantial amount of capital. 


David closes by saying that anyone interested in buying Zillow now should consider it a long-term holding, and be prepared to stomach some wild volatility in the short term.


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