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Zillow Accused of Misleading Investors on Redfin Pact
1 Jul
Summary
- An investor filed a class-action lawsuit against Zillow and its executives.
- The suit alleges Zillow misled investors about the Redfin deal's nature.
- Zillow's statements about regulatory risk and its business were allegedly false.
Zillow is now entangled in a class-action lawsuit initiated by investor Matt Breidert, concerning its February 2025 agreement with Redfin. Filed on June 9 in the U.S. District Court for the Western District of Washington, the suit names Zillow, CEO Jeremy Wacksman, and CFO Jeremy Hofmann. Breidert alleges that investors were misled about the true nature of the deal, characterizing it as an anticompetitive acquisition rather than a partnership.
The lawsuit further claims that Zillow deliberately understated its heightened regulatory risks, especially after drawing scrutiny from the Federal Trade Commission and five state attorneys general last fall. Breidert asserts that Zillow's public statements regarding its business, operations, and future prospects were materially false and misleading. He contends that this led him and others to purchase Zillow stock at artificially inflated prices.
The suit, titled Breidert v. Zillow Group, Inc., et al., is brought on behalf of individuals who purchased Zillow's class A or class C common stock between February 11, 2025, and May 7, 2026. Breidert seeks to recover damages allegedly incurred due to Zillow's violations of securities laws and has requested a jury trial. He highlights Zillow's representation of the Redfin agreement as expanding distribution and listing inventory, while asserting the reality was Redfin transferring its business to Zillow and exiting the multifamily rental advertising market.
A Zillow spokesperson affirmed the company's position, stating, "Our rental listings partnership with Redfin is pro-competitive and pro-consumer, and we remain confident in that position. We stand by our business model and will vigorously defend against these allegations." This legal challenge emerges despite Zillow's payment of $100 million to Redfin, which included ending advertising contracts, Zillow taking over that business, Redfin ceasing competition in the multifamily property market for up to nine years, and Redfin acting as an exclusive syndicator of Zillow listings.
