Zillow Offers Loses $881 Million in 2021

According to the company’s annual statement, The soon to be closing segment of Zillow Group ($ZG), Zillow Offers, lost the company $881 Million in 2021. Zillow came out of left field and notified investors that they were going to be closing this segment of their business, due to its complete inability to generate money (it did do a good job of losing them money, though).

Zillow Offers was the company’s home buying segment which bought homes for cash without sellers having to stage/show their home, ultimately making the process easier for sellers. Zillow would then make any repairs necessary and sell the home (presumably for a profit, although that clearly wasn’t the case). The algorithm used for buying properties seemingly wasn’t sophisticated enough to take into account intangibles which would impact sale price of the homes they accumulated. Hate to see it.

Zillow posted a net consolidated loss of $527.7 Million for the year 2021. Zillow’s IMT (Internet, Media, and Technology) generated a healthy $544 Million for the company. This is the segment most people are familiar with, which provides marketing services and a plethora of other software related solutions. Zillow literally just created the most revolutionary product/service and then lost so much money indulging in other unprofitable ventures.

As a result of losing just on obscene amount of money through Zillow Offers, the company is now laying off approximately 25% of their workforce, expecting to go into effect within the first half of this year. F’s in the chat.

It’s also so funny to me that within Zillow’s business risks they line out in their report, they outline “The COVID-19 pandemic.” Speaking primarily in fiscal terms, the most insane bull market in virtually every asset class as a result of QE infinity was nothing short of the perfect storm for the company.