CoStar responded Wednesday by calling the allegations “grossly misleading” and questioned DE Shaw’s motives, noting that the investor held a large stake in a direct competitor.
“If DE Shaw is concerned about visibility, it should start with itself,” the company said. “DE Shaw has never disclosed its economic exposure to CoStar Group, even though it is a long-term investor.”
CoStar provided more details on why it believes DE Shaw’s campaign may be motivated by a conflict of interest – highlighting the hedge fund’s investments in CoStar’s competitors.
“The public filing suggests that DE Shaw owns just 0.22% of CoStar Group’s common stock, but nearly 4 times as many of CoStar Group’s competitors would directly benefit from DE Shaw’s push to divest Homes.com and end the industry’s fastest-growing real estate platform,” the company said.
The site of the debate
The dispute stems from CoStar’s large investment in Homes.com and whether it creates or hinders long-term value and shareholder wealth.
DE Shaw estimates that CoStar will have spent more than $3 billion on Homes.com by the end of 2026.
The company also accused management of withholding disclosure of key performance metrics – such as new Homes.com bookings.
“During a recent earnings call, when analysts asked for new segment-level booking information, management declined to provide the information,” DE Shaw’s letter said. “Investors took notice: these confusing moves contributed to a 9 percent drop in the Company’s stock price the next day – destroying nearly $2 billion in shareholder value.”
CoStar defended its reporting practices on Tuesday – saying segment disclosures had been redirected from land-based segments to products to better reflect operating structure.
“Our new segment disclosure provides additional transparency by providing audited revenue, EBITDA, Adjusted EBITDA and margin disclosures for both the Residential and Commercial segments in our latest 10-K, as well as continuing to provide disaggregated income disclosures,” the company said. “Investors should expect the same Homes.com disclosures through our earnings calls that CoStar Group regularly provides to shareholders.”
CoStar Q4, full-year revenue decline
During the aforementioned Q4 earnings call, CoStar Group CEO Andy Florance highlighted growth across the Homes.com network.
The platform logged more than 2.1 billion visits and had 100 million unique visitors by 2025, according to Comscore, with January organic traffic up 134% year over year.
“We feel we have achieved a good balance between SEM, SEO and direct traffic,” said Florence. “This allows us to make SEM about quality traffic and leads, not just pure quantity.”
Florence added that engagement improved – with session time increasing to around four minutes and 30 seconds and the bounce rate dropping from 63% in January 2025 to 41% in January 2026.
Lead volume was up 48% year-over-year in January, with Homes.com affiliate earnings up 187%.
Despite Homes.com’s improved metrics, CoStar’s net revenue fell from $60 million last year to $47 million in Q4 2025.
For the full year, as revenue rose 19% year over year to $3.25 billion, revenue fell to $7 million from $139 million in 2024.
CoStar argued that abandoning Homes.com’s current strategy would cause “irreparable harm” to its position and investors.
