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Near-Record Trulia Shorts Crushed After Zillow Acquires Incomeless Company For $3.5 Billion

Tyler Durden's picture




 

What a difference a weekend makes... After offering $2 billion for Trulia last week (and seeing its share soar), Zillow has decided that $3.5 billion worth of its bubblicious paper money-stock is the right price for its real estate marketing and income-less competitor Zillow. Of course, on the back of near-record short interest the stock has exploded higher once again this morning and is now up over 60% from before last week's offer. We suspect the word 'synergy' will be used heavily (and not the word 'layoff') but in the interests of helping our fellow man, we present the combined firm's income statement...

They are paying this...

  • ZILLOW BUYS TRULIA FOR $3.5B IN STOCK
  • TRULIA DEAL REPRESENTS PREMIUM ABOUT 25% T0 JULY 25 CLOSE

For this:

 

... and because of this (near record short interest)

 

This happened...

 

Sorry First Western Capital Management, but it is your fault you didn't realize the market was permanently broken some time in 2009...

Remember what we have said since 2012: the only strategy that actually works with unprecedented consistency in this broken, centrally-planned market is to go long the most shorted names. Today: another case in point.

Meanwhile, while shorts are the biggest losers, here are the biggest winners. Congratulations Stevie Cohen's Point72 who added to his position, as well as Tiger Global and momo expert JAT whose 4.6% and 2.2% stakes in TRLA, respectively, are both new positions as of the latest quarter.

 

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Mon, 07/28/2014 - 08:47 | 5012132 jubber
jubber's picture

short at will after the pop?

Mon, 07/28/2014 - 08:50 | 5012145 GetZeeGold
GetZeeGold's picture

 

 

Short the bubble before it pops......what could possibly go wrong?

Mon, 07/28/2014 - 08:57 | 5012169 Occident Mortal
Occident Mortal's picture

Nice to see Steve Cohen is no longer relying on...

[ALERT] INSIDER TRADING [ALERT].

Mon, 07/28/2014 - 09:16 | 5012228 negative rates
negative rates's picture

That was a perceived break, all is well and fine now at 17,000.

Mon, 07/28/2014 - 09:17 | 5012239 Manthong
Manthong's picture

Bernie Madoff is shaking his head in amazement..

Mon, 07/28/2014 - 09:48 | 5012328 Pool Shark
Pool Shark's picture

 

 

It's the new math:

0 + 0 = "To Infinity, and Beyond!" 

Mon, 07/28/2014 - 09:09 | 5012200 NoDebt
NoDebt's picture

"short at will after the pop?"

Have you not been paying attention?  DO NOT SHORT ANYTHING!

It may look like a free lunch, but just wait until Google or Facebook steps in a few weeks from now and buys the whole shootin' match for twice this ridiculous price.

Mon, 07/28/2014 - 08:47 | 5012134 Bangin7GramRocks
Bangin7GramRocks's picture

Efficient markets doing what they do........

Mon, 07/28/2014 - 08:48 | 5012141 yogibear
yogibear's picture

Brings back memories of the DOT COM days. The Federal Reserve has succeeded
in bubblizing almost all assets. It's created a financial fantasyland.

Mon, 07/28/2014 - 10:12 | 5012407 Uncle Remus
Uncle Remus's picture

Fiat wasteland.

Cue Who.

Mon, 07/28/2014 - 08:50 | 5012146 RiskyBidness
RiskyBidness's picture

I guess alot of folks BTFD!!  HaHa

Mon, 07/28/2014 - 08:50 | 5012147 OneTinTrooper
OneTinTrooper's picture

I normally use the Kirkland brand splenda. 

Mon, 07/28/2014 - 08:50 | 5012149 buzzsaw99
buzzsaw99's picture

the fed's gonna tighten any day now. bwa ah ah

Mon, 07/28/2014 - 08:57 | 5012166 yogibear
yogibear's picture

"the fed's gonna tighten any day now"

LOL, Like with it's experiment called Japan. It's been going on for years. When Japan blows the Federal Reserve will see it's future, only a  much larger implosion.

Mon, 07/28/2014 - 08:58 | 5012167 GetZeeGold
GetZeeGold's picture

 

 

the fed's gonna tighten any day now. bwa ah ah

 

Double dog dare'm.

Mon, 07/28/2014 - 08:55 | 5012163 Whoa Dammit
Whoa Dammit's picture

I have no income either, and I am willing to sell myself for a mere $3 billion.

Mon, 07/28/2014 - 08:58 | 5012176 d edwards
d edwards's picture

EEEWWW! Crushed shorts sounds PAINFUL. :-D

Mon, 07/28/2014 - 09:18 | 5012243 Vendetta
Vendetta's picture

But in this 'market' you wear your shorts backwards....

Mon, 07/28/2014 - 08:57 | 5012172 toros
toros's picture

$5,000,000/employee

Mon, 07/28/2014 - 08:59 | 5012177 toros
toros's picture

correction $3.5M/employee

Mon, 07/28/2014 - 11:26 | 5012761 Screwtape III
Screwtape III's picture

That's before the layoffs...

Mon, 07/28/2014 - 09:04 | 5012189 SickDollar
SickDollar's picture

is it too late to join the party and start using the stock market  as a full time job?????

Mon, 07/28/2014 - 09:10 | 5012205 NoDebt
NoDebt's picture

No.  There has never been a better time to buy stocks.

Mon, 07/28/2014 - 09:34 | 5012289 SamuelMaverick
SamuelMaverick's picture

OK NoDebt, now that is some funny shit !!!

 

                     Maverick

Mon, 07/28/2014 - 12:42 | 5013184 ceilidh_trail
ceilidh_trail's picture

@sick- Nope. You too could be like "lawsofeconomic" and make $9500/week working at home on your computer. But, you'd only have to work 15 minutes/week putting in a buy order or two and then hit the pool as trading is so yesterday...

Mon, 07/28/2014 - 09:04 | 5012192 Mrs. Cog
Mrs. Cog's picture

On a separate but related note, Zillow was a great tool to help locate the right rural property with search criteria for well water, independent septic systems, wood stoves and all the creature comforts that can be self sustained away from urban populations. Trulia had better photos of many of the properties we scanned through. I recommend taking advantage of these free resources before their virtual front doors are shuttered too.

Mon, 07/28/2014 - 09:09 | 5012201 Notsobadwlad
Notsobadwlad's picture

Yup, the NSA (or whatever is behind them) is very good at databases.

Mon, 07/28/2014 - 09:55 | 5012348 Hobo Sapien
Hobo Sapien's picture

As a former real estate photographer whose employer was bought in 2007 and subsequently destroyed, (2 weeks before xmas we were informed that we had been overpaid somehow and the difference they calculated would be subtracted from the next check - 4 months later both companies were gone, nobody got their last paycheck), I approve of your post.

And +1000 for your avatar; probably not one in a hundred people here know what it means. =)

Mon, 07/28/2014 - 15:54 | 5014170 dvfco
dvfco's picture

The Squatting Man! Quite a symbol, no?

Tue, 07/29/2014 - 04:39 | 5016692 Hobo Sapien
Hobo Sapien's picture

Yeah, seems like he was trending world-wide around 10,000 BC. Roland Emmerich could have made a much more interesting film with that title.

Mon, 07/28/2014 - 09:07 | 5012196 Notsobadwlad
Notsobadwlad's picture

No conspiracy to defraud here .... "move along, move along".

Mon, 07/28/2014 - 09:10 | 5012206 Kina
Kina's picture

Smart money never learns huh

Mon, 07/28/2014 - 09:21 | 5012248 CaptOveur
CaptOveur's picture

Joey, you ever seen a Trulia short naked? Sorry, down here in muppet hell all you can do is laugh. 

Mon, 07/28/2014 - 09:22 | 5012252 pragmatic hobo
pragmatic hobo's picture

i call the top in housing market.

Mon, 07/28/2014 - 12:25 | 5013121 homiegot
homiegot's picture

You are going to be famous.

Mon, 07/28/2014 - 09:25 | 5012266 Kreditanstalt
Kreditanstalt's picture

Endgame: what happens when absolutely everyone's "business model" is predicated on selling advertising?   And no one atually PRODUCES anything anymore...?

Mon, 07/28/2014 - 09:32 | 5012284 yogibear
yogibear's picture

The goal is to go from producing goods to producing debt.

Production of infinite debt is the goal of the central banks.

Mon, 07/28/2014 - 09:28 | 5012275 Ban KKiller
Ban KKiller's picture

Zillow and Trulia will ultimately be owned by the banksters the same way the banksters own the title companies, get it? The forgery and fraud works better when you control all the facets of the crime scene. Oh, the fewer the owners the easier the fraud. See Mortgage Electronic Registration Systems, Inc and how they cheated your county out of millions in recording fees. 

Death, by law, to banksters and their criminally inept attorneys. 

Mon, 07/28/2014 - 09:35 | 5012292 Yes We Can. But...
Yes We Can. But Lets Not.'s picture

FWIW, sold my home in DC area 2 weeks ago, and first site to show/reflect he sale was Redfin. Sold it FSBO at cost of $90, saving $20+k. Had 2 contracts, sold for more than what I was asking. Guy down the street has his home listed free on zillow, but that does not get the property on the MLS.....

Mon, 07/28/2014 - 09:35 | 5012295 zipit
zipit's picture

All these takeovers of heavily shorted stocks smells like someone has figured out a way of either fleacing people and/or bailing themselves out and/or just making themselves some sort of windfall profit.

Mon, 07/28/2014 - 09:42 | 5012307 Kreditanstalt
Kreditanstalt's picture

There must be an absolutely craven, DESPERATE, utterly grovelling need for paper dollar YIELD out there on the part of big funds, hedgies, insurers, and mutuals...if not why do they keep shorting stock in a market which is COMPLETELY manipulated?

I guess when you promised your clients payouts in the 6-8% range and there's next-to-no real "growth" anywhere, you do reckless things...again and again and again...

Mon, 07/28/2014 - 09:40 | 5012306 yogibear
yogibear's picture

Companies losing money should all be IPOing right now. Plenty of people looking to give their money away.

Mon, 07/28/2014 - 09:46 | 5012326 pound the vix
pound the vix's picture

I wonder if Morgan Stanley advised on the deal???

Mon, 07/28/2014 - 09:59 | 5012333 novictim
novictim's picture

Both Zillow and Trulia benefited from the court ruling in an antitrust case that allowed them to gain access to and print MLS listings.  That was a big deal, right? They basically have the ability to provide everything a Real estate agent would provide minus the "great company".

So the potenial to charge fees for access is real.  THe only problem is that ANYONE can now do the same as Zillow is doing.  Buying Trulia in no way protects them.  And as Zillow tries to earn a fee then people will flock to the competitors.

Well, one other path to riches could be that, for a price, Zillow helps manipulate the displayed listings to direct people to buy certain listings .  In other words, they can engage in fraud as a business model.

Hey, who is going to stop them?  The DOJ?  The FCC?  Fraud encapsulates the entire system that we are living in today.  From GDP numbers to uneployment numbers to Gold prices, this is a house of cards and fraud is growing that house, card by card, day by day. 

Don't sneeze!

Mon, 07/28/2014 - 10:46 | 5012521 Boxed Merlot
Boxed Merlot's picture

and fraud is growing that house...

 

 

You make some valid points.  I can remember laughing at the "values" on these sites to properties in my neighborhood and thankfully didn't "buy" their "estimates".  But how many have, do and will?  "Mark to market" indeed.  These are just more tools for their "shareholders" to ramp up their derivative portfolios even higher. 

They have taken the Homes of the US middle class and turned them into the ultimate device to manipulate monetary policy.  Who needs revenue when the true worth is an unbridled control of setting the “values” of their holdings at whatever they want?

While having competition in this field would be welcomed and sought, who would use it if the “standard” set by these truly TBTF entities benefits local tax bases with ever rising (inflated) tax receipts year after year?  Or better yet, the threat to lower / reduce those receipts if some independent minded jurist should ever think of exercising justice?

 

Jmo.

 

Mon, 07/28/2014 - 11:08 | 5012640 Arthur
Arthur's picture

Hmm,  I am liking Zillow at the moment.  

Said my house value and rental is about 10% over what I think and I am renting out the house.  Kinda like retail pricing.

Would also say that Zillows assesment has become much more accurate over the last few years.  Which is what you would expect as they gather more data.

 

 

Mon, 07/28/2014 - 15:28 | 5013994 Boxed Merlot
Boxed Merlot's picture

Zillows assessment has become much more accurate over the last few years.  Which is what you would expect as they gather more data...

 

 

What part of "past performance is no guarantee of future results" is not resonating?  If every property in my neighborhood could be had at the same particular moment in time any of these services claim, the overall values most assuredly would not even be close to what's being claimed.

These money changers have learned from their failure in their MERS foray to even go further upstream in order to gain access to and hypothecate beyond reason the traditional US middleclass' go to bedrock of security / faith / credit and simultaneously weaken / destroy the structure at it's very foundation.

Once the rule of law, i.e. uniform laws of bankruptcy, was circumvented, all bets were off and we’ve been off to the races.  Now, whose horse is going to come in “first”?

 

Jmo.

Mon, 07/28/2014 - 10:05 | 5012383 scraping_by
scraping_by's picture

One almost feels sorry for traditional investment firms using the analysis tools they learned in business schools on the current market. All the textbooks say a company with revenue less than expenses, big debt, no hard assets, and many competitors is a surefire short. While that may have been true in a market of many individual investors making independant decisions, it's completely out of touch with a market defined by the world's central banks printing to inflate to a big number goal.

Definitely Dot Com 2.0.

 

Mon, 07/28/2014 - 10:07 | 5012390 mastersnark
mastersnark's picture

1999 called, it wants to investing strategy back.

Mon, 07/28/2014 - 10:23 | 5012451 Apocalicious
Apocalicious's picture

I'm old enough to know how little I know, but investing today seems to look something like this.

 

Disregard fundamental investing. Then pick from below.

 

1) This one is really simple - get long what the overlords are A) long themselves or B) explicitly supporting. B is slightly riskier. 

 

2) You can attempt to find pockets of value which others have not yet found. This is riskier still, and increasingly difficult. Lots of smart people doing this. The return on effort compared to A above is low.

 

3) You can short things that the overlords are not A) long themselves or B) willing to allow collapse. However, both carry the risk that some fool engaging in number 2 above may come in and wipe you out. There are certainly thousands if not millions of fools with more money than you, dumber thay may be. 

 

Other than the dollar, I struggle to find things the overlords actively want to kill. 

 

There are no "markets" anymore. 

Mon, 07/28/2014 - 10:55 | 5012570 gcjohns1971
gcjohns1971's picture

$3.5 Billion in return for NOTHING implies that the value of $3.5 Billion in real terms is ...NOTHING.

Mon, 07/28/2014 - 12:21 | 5013098 Uncle Remus
Mon, 07/28/2014 - 11:30 | 5012785 PT
PT's picture

I think this is the one but my "broadband" (hahaha) internet is currently running slower than a conscientious epileptic morse code transmitter who is trying to correct all his errors as he goes along:

http://www.animetoon.tv/the-simpsons-season-9-episode-14

Is that it?

Mon, 07/28/2014 - 12:19 | 5013091 homiegot
homiegot's picture

They just bought Friendster.

Mon, 07/28/2014 - 12:42 | 5013180 MrVincent
MrVincent's picture

Trulia? Is that a flower or something? Never heard of them.

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