Summary
“The time for talking is over,” stated Daniel Loeb.
Daniel Loeb, the billionaire activist investor founder and CEO of the alternative asset management firm Third Point LLC, is calling for a change of leadership at CoStar Group (NASDAQ: CSGP), claiming the company’s pursuit of the residential real estate industry has been a money-losing debacle.
In a letter to the company’s board of directors, Loeb claimed “other shareholders” were upset with CoStar CEO Andy Florance’s leadership. He cited an “abysmal stock performance of the past five years – down 27% versus a 94% total return for the S&P 500,” claimed this was due to “the misallocation of billions of dollars into Homes.com, overseen by a feckless board of directors that has failed to protect shareholders from Mr. Florance’s quixotic quest while rewarding him with exorbitant pay packages. Like an elementary school child who wins a prize even for finishing last, Mr. Florance’s bonuses are perhaps the costliest ‘Participation Award’ our firm has witnessed.”
Loeb claimed that multiple meetings with CoStar management have failed to produce the results he hoped for, he announced plans to present shareholders with candidates for a new board of directors.
“The time for talking is over,” Loeb wrote. “Our standstill period expired at midnight, and we will now take concrete actions to protect our investment and ensure that the Company is governed and managed in a manner that will create long-term, sustainable value for all shareholders. Since most board members appear incapable of imposing discipline on Mr. Florance’s empire-building gambit, we intend to introduce shareholders to a slate of highly experienced new directors to be voted onto the board to reverse the downward spiral that has become synonymous with this CEO and his supine enablers.”
Loeb added he was still supportive of “CoStar’s world-class core commercial real estate (CRE) business franchise” and called for either “improving governance, divesting or shutting down” the residential real estate operations.
Reuters reported Loeb’s focus on CoStar follows his previous activist campaigns against the Walt Disney Co., Intel, and Campbell’s to improve their financial performances. Third Point is among CoStar’s 15 largest investors.
A CoStar spokesperson responded to Loeb’s letter with a statement that said, “We enter 2026 with considerable momentum and a clear plan to continue building our core platforms while scaling Homes.com, which is a critical component to our comprehensive digital real estate platform and next chapter of profitable growth. Our 2026 and long-term guidance – which represents sustained, accelerated revenue growth and margin expansion – reflected the Board’s confidence in our ability to enhance stockholder value.”
