Housevalues
Speaking of the valuation of online real estate companies, Yahoo Tech Ticker has an interesting segment about the famous Renaissance Technologies hedge fund. The firm is notorious for only hiring PHDs and with a very strong bent toward mathematical and technology backgrounds.
But you don’t need a PHD to work out one of the firm’s current strategies: They buy companies that are trading at less than or near their cash balances and whose core operations are roughly break even.
One such company is Housevalues, a lead generator for the real estate industry that is in the process of reinventing itself.
The company has $65m in cash and trades at a $67m valuation. It’s operations are break-even on a cash basis/slightly positive.
The disconnect between the degenerate public market view (MOVE, Housevalues and ZipRealty) and the relatively optimistic private market view (Zillow, Trulia and Redfin) of online real estate companies is fascinating to me. Something just has to change and soon.
