Zillow Offers automated house flipping system is shut down
Property and technology company Zillow Group shuttered its i-Buying home flipping business, sa ying it had lost USD 881 million on the business . Zillow Offers used big data and a utomated valuation algorithms to make offers on homes across the US, with the aim of selling acquistions quickly for a profit. However, the company appeared to lose faith in the ability of its algorithm to make reliable predictions, including during so-called 'black swan' events such as COVID-19. In a letter to shareholders, CEO Rich Barton explained Zillow Offers was 'too risky, too volatile to our earnings and operations', and provided 'too low of a return on equity opportunity, and too narrow in its ability to serve our customers.' Zillow said it would lay off 2,000+ employees. The company was also hit with two class action lawsuits claiming it had misled investors about the true nature of its financial performance . System 🤖 Zillow 🔗 Developer: Zillow Group Country: USA Sector: Real estate Purpose: Estimate and predict real estate value Technology: Automated valuation model Issue: Accuracy/reliability Resources 📃 Zillow Group Q3 2021 Shareholder Letter Zillow Group Q4 2021 Shareholder Letter Legal, regulatory 👩🏼⚖️ https://www.classaction.org/news/zillows-decision-to-wind-down-zillow-offers-after-q3-losses-sparks-stock-drop-class-action https://www.pr-inside.com/zillow-group-inc-nasdaq-z-zg-shareholder-class-action-alert-bernstein-r4862244.htm
- Date it happened
- 2021-11-01
- Organisation involved
- Zillow
- Product, system or model
- Zestimate
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