CoStar burnout: Time to turn the lights out for Homes.com?

For years, CoStar Group (CSGP) CEO Andy Florance has defended a relentless superior expenditure strategy by pointing to a $100 cardinal existent property full addressable marketplace (TAM) helium believes his institution is destined to lead.

At the bosom of that stake is Homes.com, the level Florance has pitched arsenic the "clean" alternate to the industry's lead-selling giants

But arsenic 2026 unfolds, the stars are not aligning.

CoStar's banal has fallen astir 32% twelvemonth to date, dramatically trailing the S&P 500. Activist investors are pressing hard for an exit, and absorption has responded not with austerity — but with a high-profile AI integration that critics accidental lone deepens the problem.

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The hostility reached a boiling constituent successful precocious January 2026, erstwhile Third Point CEO Daniel Loeb sent a blistering missive to CoStar’s board.

Loeb did not mince words, accusing absorption of "profligate spending" and "disastrous superior allocation— and singling retired Florance's compensation arsenic an affront to shareholders.

"Like an simple schoolhouse kid who wins a prize adjacent for finishing last, Mr. Florance's bonuses are possibly the costliest 'Participation Award' our steadfast has witnessed," Loeb wrote.

The jab was pointed: according to the letter, Florance received a $37 cardinal wage bundle successful 2024, a play during which the banal fell 27% implicit 5 years against a 94% full instrumentality for the S&P 500.

Third Point's investigation highlighted a grim reality: contempt a cumulative concern of astir $3 cardinal implicit 5 years, the residential conception generated a specified $80 cardinal successful projected gross for 2025.

Loeb's request was clear: the committee indispensable instantly see "strategic alternatives" for Homes.com — shorthand for a sale, spin-off, oregon full shutdown.

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Less than 2 weeks later, connected February 4, The D.E. Shaw Group followed with its ain nationalist missive to the board, expressing sedate disappointment successful what the hedge money characterized arsenic failed enactment and reckless superior allocation.

Managing directors Edwin Jager and Michael O'Mary said the steadfast had been "gravely disappointed" aft spending a twelvemonth privately urging the committee toward reform.

The missive landed a sobering statistic: "As a consequence, contiguous each shareholder who has purchased CoStar's banal successful the past 5 years has mislaid money."