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Zillow Offers Disclosure Class Action Lawsuit Overview:
- Who: Dibakar Barua lodged a class action lawsuit against Zillow Group, Inc.
- Why: The plaintiff alleges Zillow made false and/or misleading statements and failed to disclose critical information to investors about the Zillow Offers side of its business.
- Where: The lawsuit was filed in Washington federal court.
Zillow made materially false statements and failed to disclose material adverse facts about the Zillow Offers side of the company’s business, according to a new class action lawsuit.
Zillow Offers buys and sells homes directly in dozens of markets across the country. Lead plaintiff Dibakar Barua says Zillow failed to disclose to investors that, despite operational improvements, the company experienced significant unpredictability forecasting home prices for its Zillow Offers business.
He claims that such unpredictability, as well as labor and supply shortages, led to a backlog of inventory and that, as a result, the company was reasonably likely to wind down its Zillow Offers business, which would have a material adverse impact on its financial results.
The plaintiff also claims Zillow’s positive statements about the company’s business, operations and prospects were materially misleading and/or lacked a reasonable basis.
Barua says the company’s stock price plummeted after investors discovered that the thousands of homes Zillow purchased during the coronavirus housing boom had lost value, resulting in hundreds of millions of dollars in losses for the company.
The price of the company’s securities significantly declined when the misrepresentations were revealed, causing investors’ losses, according to the class action lawsuit.
Zillow Executives To Blame For Misleading Information, Class Action Says
Zillow’s top three executives—Richard Barton, Allen Parker, and Jeremy Wacksman—are to blame for the false and misleading statements, Barua claims, because of their positions within the company as CEO, chief financial officer, and chief operating officer, respectively, and their access to nonpublic information.
“The individual defendants were provided with copies of the company’s reports and press releases … and had the ability and opportunity to prevent their issuance or cause them to be corrected,” the lawsuit says. “The individual defendants knew that the adverse facts specified herein had not been disclosed to, and were being concealed from, the public and that the positive representations which were being made were then materially false and/or misleading.”
Barua is suing on behalf of all people and entities who purchased or acquired Zillow securities between Feb. 10 and Nov. 2, 2021.
The plaintiff, on behalf of himself and the classes, seeks compensatory damages and reasonable costs and expenses incurred in this action, including counsel fees and expert fees.
This is not the only legal action facing Zillow. Earlier this year, a real estate company filed an antitrust lawsuit against Zillow and Trulia accusing the platforms of effectively locking them out of the online housing market.
In 2019, a class action lawsuit alleged that Zillow unfairly favored its premium members by redirecting users to “premier” agents and away from the agents who list the homes, but did not pay for premium access to the site.
Are you a Zillow investor who lost money via Zillow Offers? Let us know in the comments!
The plaintiff is represented by Benjamin T.G. Nivison of Rossi Vucinovich, P.C., and Robert V. Prongay, Charles H. Linehan, and Pavithra Rajesh of Glancy Prongay & Murray LLP.
The Zillow Offers Disclosure Class Action Lawsuit is Barua, et al. v. Zillow Group, Inc., et al., Case No. 2:21-cv-01551, in the U.S. District Court for the Western District of Washington at Seattle.
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One thought on Zillow Offers Pandemic Home Purchases Misled Investors, Claims Class Action
Zillow Investor, Lost 15k due to lack of integrity on behalf of Company