I have been commenting for some time about Zillow including duplicate Users in its Unique User count. But when the CEO claims a First Amendment Right as justification for publishing inaccurate Zestimates on homes then nothing surprises me regarding the accuracy of any statement he makes.
I recently posted the following comment on seeking alpha regarding Zillows Unique Users
"Zillows 80 million Monthly Unique Users is a myth with the 'real' number for June being 46 million according to ComScore. The reason for the difference is that Zillow counts Users accessing with multiple devices as different Users."
Back in January this year when Zillow reported 69.9M Unique Users which was a staggering increase of 34% over the December UU number and I was surprised no Analyst didn't ask Zillow to clarify what drove this increase, or if they have changed the methodology for counting Unique Users. It seems that smooth talking Spencer Rascoff has had an easy ride with Analysts who never ask 'real' meaningful questions on what is really happening at Zillow. Too much hype and puffery.
Check out insider selling - the trend seems to be continuing. Insider selling, Barron's story on flawed business model and questions about revenue reporting, Yahoo story on faulty unique user count, larger than expected losses in 2Q14, ...the negatives are piling up and yet Z is going down very slowly. Four big players apparently decided to hold on their shares, but for how long?
Maybe so, but unfortunately Barrons has used a BULLHORN for Zillow to crash...and all the short borrow is LONG GONE
Those who bought shares near the peak and losing money, could they file a lawsuit against Z for not informing the investors clearly the revenue numbers and unique user numbers the way they were reporting in fact of stories in Barron's and Yahoo Finance?
According to Yahoo story, Z admits they may be overstating user count in SEC filings (a user using different devices counted as different unique user and if you use two different Internet browser, they are counted double. It's kind of strange that a publicly held company has so much leeway in how they report data - looks like an orchestrated way of inflating and misleading investors.
Barron's raised the issue of if Z was overstating revenues because they were not counting discounts as negative revenues. Now this story raises the specter of Z not being accurate in how they count user base. I always suspected CEO of Z was hyping stock when he would grant so many interviews and they would release so many press releases talking about things that were meaningless.
My crystal ball based on technical charts says Z will go down sharply on Thursday. I wouldn't be surprised if Z closes on Friday between 118 and 120.
Sentiment: Strong Sell
There's no borrow out there, and that is a scary thing. If history is any guide, this thing could turn on a dime and rip the Shorts faces off.....
There is no affordable housing (in general...there are hot markets) and people are moving to rentals. And somebody looking to plunk down $5M on a house isnt skimming zillow.