Daniel Loeb, the billionaire activist investor founder and CEO of the alternative asset management firm Third Point LLC, has withdrawn his threat of a proxy fight to force a change of leadership at CoStar Group (NASDAQ: CSGP).
According to a Reuters report citing unnamed “sources familiar with the matter” and a letter from Loeb that was not made public, Third Point sold its entire stake in the company, which owns Apartments.com and Homes.com. The change of direction came after Loeb acknowledged he would not be able to force CoStar to focus primarily on its core business.
“We no longer believe that our original thesis holds true today and have disposed of our position in its entirety,” Loeb wrote in a letter to investors.
Reuters added that Third Point was among the 15 largest investors in CoStar, although the exact size of its holdings was not disclosed.
In January, Loeb sent a letter to the company’s board that 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.”
CoStar did not publicly comment on the report of Loeb’s withdrawn threat.
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