Two Wrongs Make A Right? Zillow, Trulia Soar On Incomeless Acquisition Plan
Somehow this makes perfect sense: Zillow's stock is up over 22% on news that it will acquire rival real estate company Trulia for $2 billion. Trulia is up 32%, which is about half in absolute terms of the $1 billion Zillow's market cap has grown by in the past few moments to $6 billion. Imagine if it had paid even more for Trulia? And the piece de resistance: Neither company is currently profitable on an annual basis - the combined net income of the two companies is... zero. Two wrongs do not make a right, or rather didn't. And then the new normal came around...
Wait, we know: Synergies (or at least infinite NOLs).
Upon announcing a $2bn acquisition of a money-losing competitor, Zillow "investors" added $1 Billion in market cap to the company... yeah yeah synergies
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Nope, no bubble here at all...
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