Zillow Group Inc. dropped after giving a 2015 revenue forecast that fell short, blaming delays in regulatory approval for its purchase of rival real estate website Trulia Inc.
The stock fell 3.2% to $89.93 at 11:08 a.m. in New York. The shares earlier slumped as much as 13% for the biggest intraday drop in almost two and a half years after being briefly halted.
"2015 is a transition year and we're trending a couple quarters behind where we'd like to be, due to the protracted FTC approval process which only ended two months ago," Chief Executive Officer Spencer Rascoff said on a conference call to update on Zillow's progress since the deal closed on Feb. 17.
The real estate website expects pro-forma revenue of about $690 million this year, with earnings before interest, taxes, depreciation and amortization of $80 million to $85 million, Rascoff said. The company only gave pro-forma numbers, which assume the Trulia deal had would have closed at the start of the year. Analysts anticipated revenue of $733 million, the average of estimates compiled by Bloomberg.
The company bought Trulia for $2.5 billion including stock-based compensation, reflecting a decline in Zillow's share price since the agreement was signed in July.
Investor Kevin Stadtler, president of Stadtler Capital Management in Fort Worth, Texas, said he's buying additional shares on today's dip because of the long-term prospects of the company. Zillow is a useful tool for real estate buyers, sellers and agents, and will benefit from the improving economy, Stadtler said, declining to say how many shares he owns.
Zillow will provide a formal earnings outlook when it releases first-quarter results in mid-May.
