economy
January 31, 2026
Activist Dan Loeb dusts off his poison pen as he seeks a board refresh at CoStar Group
Investors are seeing shades of yesteryear's Dan Loeb in a letter he recently wrote to the CoStar board.
TL;DR
- Third Point has sent a letter to CoStar Group's board calling for significant changes.
- The demands include replacing a majority of the board and aligning management compensation with total shareholder return.
- Third Point wants CoStar to consider strategic alternatives for its Homes.com and related residential real estate (RRE) businesses.
- The firm advocates for CoStar to refocus on its core commercial real estate (CRE) business.
- CoStar's RRE investments, particularly in Homes.com, have resulted in significant financial losses and missed targets.
- Despite investing billions, the RRE segment generated minimal revenue, and Homes.com is projected to reduce adjusted EBITDA substantially.
- Third Point believes CoStar's core CRE business has significant untapped potential and growth opportunities.
- The activist firm plans to nominate a new slate of directors now that its standstill restrictions have expired.
- CoStar's CEO, Andrew Florance, received high compensation despite the company's underperformance, a point of contention for Third Point.
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