Zillow Class Action Claims Company Misled Investors About Current, Future Success Of Home-Buying Service

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Zillow Offers Securities Class Action Lawsuit Overview: 

• Who: Aaron Winston Hillier filed a class action lawsuit against Zillow Group, Inc. and four of its executives.
• Why: Hillier claims Zillow investors lost money due to the company’s dishonesty about the strength of its Zillow Offers home-buying service.
• Where: The class action lawsuit was filed in Washington federal court.

Zillow Group misled investors about the ability and sustainability of its Zillow Offers home-buying service, a new class action lawsuit alleges. 

Plaintiff Aaron Winston Hillier claims Zillow failed to inform investors that its Zillow Offers service was unable to properly price homes for purchase and was dealing with a backlog of inventory. 

“As a result of defendants’ wrongful acts and omissions, and the resulting declines in the market value of the company’s securities, plaintiff and other members of the class have suffered significant damages,” Hillier said.

Hillier claims Zillow knew it would likely have to “wind down” its Zillow Offers service, which would hurt the company’s financial results and subsequently harm investors. 

Analysts Revealed Zillow Offers’ Struggles, Warned Service Would Not Meet Financial Expectations

Zillow Offers’ struggles were revealed in October 2021 by analysts from RBC Capital Markets who warned the service would not meet its financial expectations and decided to lower their price targets, according to the class action lawsuit. 

Zillow’s common and capital stock dipped following the news, and the company’s securities continued to fall as more information continued coming out in the subsequent weeks, Hillier says.

Hillier claims the price dipped after Zillow itself acknowledged the struggles, media reports revealed the houses the company bought were worth less than what they’d paid for them and when it announced it would be “winding down” the program entirely.

Hillier claims Zillow violated a pair of sections of the Securities and Exchange Act of 1934. He is demanding a jury trial and requesting compensatory damages and other equitable relief for himself and all class members. 

Hillier wants to represent a nationwide class of individuals who purchased or otherwise acquired Zillow securities between Aug. 7, 2021, and Nov. 2, 2021. 

A separate class action lawsuit was filed against Zillow over its Zillow Offers service in November by an investor arguing the company made false and misleading claims about it.

Were you financially injured when Zillow’s stock price dropped due to revelations about its Zillow Offers service? Let us know in the comments! 

The plaintiff is represented by Bradley S. Keller and John A. Tondini of Byrnes Keller Cromwell LLP; and Naumon A. Amjed, Darren J. Check, Ryan T. Degnan and Karissa J. Sauder of Kessler Topaz Meltzer & Check, LLP. 

The Zillow Offers Securities Class Action Lawsuit is Hillier v. Zillow Group, Inc., Case No. 2:22-cv-00014, in the U.S. District Court for the Western District of Washington.

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