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I just wrote an article about Redfin (NASDAQ:RDFN) and was moving on to other investment stories. But Redfin’s Q1 earnings and conference call is just too good to pass up.
This now $11 stock is down about 64% from where two years ago I first suggested to sell it (Seeking Alpha). And it is down nearly 90% from its February 15, 2021 high. It is even down from its $15 IPO price back in 2017.
This kind of performance would seem to call for some humility by management when speaking to investors. In the case of Glenn Kelman, Redfin’s CEO, apparently not.
The hype began on Day 1 as a public company: “Kelman characterized Redfin as the ‘Amazon of real estate’” (CNBC). It persists today. Here are some quotes from its Q1 investor conference call:
“An already massive competitive advantage, largely unchecked by competing brokers, has widened.”
“We’re running not because of how good it will feel when we stop, but because we were born to run, and we plan to win.”
“Redfin performed significantly better in the first quarter than expected.”
And my favorite, with a Wall Street stock analyst as the set-up guy:
Stock analyst. “Glenn, you really should get a music soundtrack to back you up when you go through your prepared remarks. You’ve got so much enthusiasm, that’s actually wonderful.”
Glenn Kelman. “I love the idea of a music soundtrack next quarter.”
I await the choice of music.
I don’t know about you, but all that hype has revved me up! Can’t wait to see the Redfin’s Q1 numbers. I’ll bet they’re going to make Apple CEO Tim Cook green with jealousy. And make Warren Buffet rue the acquisition that got away. And make Jay-Z…OK, you’ve got the idea.
Here we go. These numbers come from Redfin’s Q1 press release.
EPS: ($0.86) versus ($0.37) a year ago. More than double the loss. And last year’s Q1 was in the middle of the home sale boom, yet Redfin lost money.
Operating cash flow: ($60) million. It’s been a while since I was in business school, but isn’t the goal of a business to collect cash, not give it …….