Vanguard CEO Tim Buckley and Redfin CEO Glenn Kelman
The investment firm Vanguard Group has purchased a more than 10 percent stake in Redfin.
Recent filings with the U.S. Securities and Exchange Commission show that Vanguard now owns 9,444,137 Redfin shares, which equates to a 10.54 percent stake in the company, according to Inman. The investment should be worth more than $160 million based on Redfin’s $16.96 closing stock price on Friday.
Last quarter, Redfin saw revenues increase 28 percent year over year, but its net income tumbled 67 percent. The discount brokerage was grappling with what its CEO referred to as a “temporary retreat” in the residential market. The firm, following a big advertising and hiring push, is expected to take a slower recruiting approach this year.
MIT Center for Real Estate lecturer Jen Cookke told Inman that Vanguard’s investment suggests it is betting on the “market share opportunity and growth potential of Redfin” and thinks it “will be the dominant player” in the business of purchasing homes.
“The market share potential is enormous,” Cookke said, “and even if Redfin is in the top three providers, this investment will pay off.” [Inman] – Eddie Small
Source: The Real Deal Los Angeles