Zillow Group Inc. rose in late trading Thursday after the company announced it would buy back shares as it makes progress in winding up its ill-fated home flipping deal.
Zillow said it had already "sold or agreed to more than 50% of the homes to be resold throughout the dismantling process," a statement said in a statement.
The company also said it expects the home flipping unit known as Zillow Offers to generate revenue of up to $ 2.9 billion in the fourth quarter, up from an earlier forecast of $ 2.1 billion .
"We appreciate the progress in our downsizing efforts and understand that not going through Zillow Offers will enable us to have a more capital-efficient balance sheet and business development," said Chief Executive Officer Rich Barton in the statement. "Today we see an opportune time to announce a share buyback program."
The shares rose 8.2% to $ 58.20. The stock was down more than 60% by the close of trading on Thursday that year.
Zillow announced last month that it would be giving up its home flipping business. The company ended the third quarter with around 18,000 homes owned or under contract. It has attempted to sell real estate through a variety of channels. This also includes direct sales to institutional landlords. Last month it agreed to sell 2,000 homes to Pretium Partners.
Zillow started the home flipping business in 2018 to compete with an emerging cohort of tech companies looking to simplify the process of selling a home.
But business has gotten into trouble in the last few months. On October 17, Bloomberg reported that Zillow would stop pursuing new acquisitions, a move the company attributes to the labor and supply shortages that have ravaged the global economy.
It quickly became clear that the company had paid too much for their own homes. On Nov. 2, Zillow said it would be leaving the home flipping business and writing off its inventory of homes by up to $ 569 million.