Zillow (NASDAQ:Z) (NASDAQ:ZG) announces the layoff of 25% of its staff and the shuttering of its home-buying business, causing shares to hit a 52-week low. Bed Bath & Beyond (NASDAQ:BBBY) pops on a partnership with Kroger and an update on its share buyback plan. Motley Fool analyst Asit Sharma, with host Chris Hill, breaks down those stories and Lyft‘s (NASDAQ:LYFT) ongoing struggle to work out its own economics.
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This video was recorded on Nov. 3, 2021.
Chris Hill: It’s Wednesday, November 3rd. Welcome to Market Foolery. I’m Chris Hill with me today, the one and only Asit Sharma. Thanks for being here.
Asit Sharma: Chris, thank you for having me, sir.
Chris Hill: We’ve got ridesharing, we’ve got the stock of the day. We’re going to begin with the three alarm fire, that is Zillow. The third quarter results that Zillow posted after the closing bell on Tuesday don’t matter. I’m sorry to say that Zillow, but they don’t matter because the company announced it is getting out of the home buying business altogether and it is also laying off 25 percent of its employees. At the moment, shares of Zillow are down more than 18 percent, hitting a 52-week low. We can go over the results if you want. But to me, this announcement about the home buying business answers the question that we raised a couple of weeks ago when they announced that they were pausing it. Because they said, “We’re pausing this for the rest of 2021,” which was a 10-week window. At the time we were like, “So at some point in the next 10 weeks, we’re going to get an announcement.” They’re going to say it’s either back on in January or they’re going to push it back. It didn’t occur to me that they were just shut the whole thing down altogether.
Asit Sharma: I know, right. The other shoe drops with a huge thud. This is very surprising in some ways, Chris, but maybe not so surprising in the others. I want to say here, this is not peanuts. We’re talking about a $300 million write down of inventory, additional charges related to homes that are under contract of 240-265 million, and also pre-tax restructuring charges estimated at approximately 175 million to $230 million, this is hundreds of millions of …….