1/27/2026
Loeb's Third Point Plans to Engage CoStar, Sources Say
Reuters (01/27/26) Herbst-Bayliss, Svea
With its first activist campaign in three years, hedge fund Third Point will try to force CoStar Group (CSGP.O), the owner of Apartments.com and Homes.com, to change board directors and restructure operations, according to a document and two people familiar with the matter. Founded by Daniel Loeb, Third Point is preparing to nominate several directors to CoStar's eight-person board, said the sources, who are not permitted to discuss the plans publicly. Loeb has said privately that the majority of CoStar's directors need to be replaced to help cut costs - including the CEO's compensation - and focus on boosting the share price, the sources said. Third Point wants the real estate data company to focus on its core commercial business and shut down or sell its residential operation, the people added. CoStar, which has a market capitalization of $28 billion, offers proprietary information and analytics to real estate developers and tenants. Several years ago, it expanded into residential real estate to compete with market leader Zillow Group. Loeb's plans for a board fight are emerging just hours after a standstill agreement - signed last year and designed to keep the hedge fund from airing its complaints publicly - expired at midnight. For years, Loeb shocked and delighted Wall Street with harsh assessments of corporate America while pushing companies including Walt Disney (DIS.N), Intel (INTC.O), and Campbell's (CPB.O) to perform better. Now he is taking aim at CoStar CEO Andy Florance and his decision to spend billions of dollars to expand into online classifieds in the residential real estate industry. Earlier this month, CoStar said it expected to reduce its net investment in Homes.com by about $100 million a year until 2030. The company also unveiled a new $1.5 billion share repurchase plan, but did not provide additional details like when it will occur. A representative for CoStar was not immediately available for comment. Loeb has privately compared Florance to a young child who wins a prize for finishing last, calling the CEO's bonuses the "costliest participation award" he has ever seen, the sources said. By trying to make Homes.com compete with Zillow without offering a significantly different product, Florance and the board are responsible for a 27% drop in the stock price over the course of five years while the broader S&P 500 stock index surged 94%, Loeb has said privately, according to the sources. Now, Loeb wants new CoStar directors who can impose some discipline on the CEO, reverse years of heavy spending and restore investor trust, the sources said. Third Point is sure that CoStar's core business, CoStar Suite, has room to improve its revenue if it raised prices and targeted investors and international customers, the sources said. Third Point ranks among CoStar's 15 largest investors and has been engaging with the company for some time. Last year it reached a settlement with CoStar, paving the way for John Berisford, a former president of S&P Global Ratings, to join the board. At the same time, hedge fund DE Shaw also reached a settlement which allowed former Disney Chief Financial Officer Christine McCarthy to become a director. Etsy's ex-finance chief Rachel Glaser also joined the board. The Third Point and DE Shaw directors joined a newly created four-person capital allocation committee, raising hopes among shareholders that the board and management might consider alternatives for the residential real estate business. But Loeb has been frustrated by a lack of progress and a slide in CoStar's share price, which fell 14% over the past year to close at $65.81 on Monday. For Third Point, which oversees $24 billion in assets, the planned CoStar campaign marks a return to activism as more investors employ aggressive tactics and urge companies to sell all or parts of themselves.
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