Short-seller Citron questions Zillow's business model

Fri Sep 20, 2013 11:45am EDT

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(Reuters) - Shares of real estate website Zillow Inc (Z.O) fell after short-seller Citron Research questioned its business model and noted that senior executives have been selling the stock.

Zillow shares, which have risen about 250 percent this year, fell as much as 4.5 percent on the Nasdaq on Friday after Citron said the company was spending huge amounts on marketing to push up sales.

"Zillow spent more getting revenue than the revenue itself. Is this a business?," Citron said in its report. (

Citron said the company has not made a "meaningful profit" in the seven years of its existence using the same business model. "Citron doesn't see that changing any time soon."

Zillow was not immediately available for comment.

"Insiders have sold more in stock than the company has done in total revenue since IPO," Citron said in the report. The company went public in July 2011.

Citron published a similar report on Zillow about a year ago, saying the company did not have revenue transparency in its business model. (

Zillow shares were down 3.75 percent at $94.59 in late morning trading.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Saumyadeb Chakrabarty)

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