CoStar Gets A Makeover! Is This The End Of Dr Evil's Real Estate Empire?!

Rrrrrright CoStar is a Biggie in Real Estate

Alright alright alright listen up you Austin Powers wannabes! It seems CoStar Group Inc. those titans of the online real estate world – you know the guys behind CoStar LoopNet Apartments.com and Homes.com – are getting a bit of a shakeup. And not the good kind like a shaken martini shaken...not stirred. More like a shaken baby...seals. Yes baby seals. Wait where was I? Ah yes CoStar. This behemoth valued at a paltry $32.64 billion (peanuts!) has been playing footsie with some pesky activist investors.

Enter the Sharks: D.E. Shaw and Third Point

These sharks D.E. Shaw and Third Point aren't your average goldfish. They're activist investors – the kind who poke and prod until companies do what they want. Apparently they've been whispering sweet nothings (or maybe threatening lawsuits details are fuzzy) into CoStar's ear about oh I don't know maybe the fact that they're throwing money down the Homes.com toilet? That's right they're diverting roughly 75% of the earnings from their core business to fund the $900 million of losses from Homes.com. It's like throwing good money after bad...or in my case throwing millions of dollars after sharks with frickin' laser beams attached to their heads because you know... that's just how I roll!

Boardroom Bloodbath: Who's In Who's Out!

And what did these 'activists' achieve you ask? Well only a complete board makeover! Christine McCarthy John Berisford and Rachel Glaser are in while Michael Klein Christopher Nassetta and Laura Kaplan are out. It's like musical chairs but with slightly more boring people and significantly less funk. And to top it off Louise Sams is the new independent board chair which is probably a good thing. Can't have those pesky CEOs running the show. Control is key people! Key I say! And now there is a new capital allocation committee which will assess international expansion too. Oooh baby I LIKE IT!

The Homes.com Debacle: A Spinoff in the Making?

The main bone of contention seems to be this Homes.com business. Apparently it's a money pit sucking away the profits from CoStar's core empire. The new capital allocation committee will probably be tasked with figuring out how to fund this failing enterprise without draining the lifeblood of the company. A spinoff? A partial sale? Maybe they'll just burn it to the ground and collect the insurance money. Who knows? Maybe I'll buy it! (I have to keep up to date with real estate or how will I buy my next volcano lair!)

International Intrigue! Expanding the Evil Empire!

CoStar has been sniffing around some international deals like acquiring OnTheMarket.com in the UK and making a play for Domain Holdings in Australia. It is like playing Risk and the world is up for grabs. This new committee will undoubtedly be poking around these deals deciding if they're worth the trouble. Expanding internationally can be tricky – different laws different customs different opportunities to build more lairs! I mean...to grow a profitable business.

The Bottom Line: More Money More Power! Mwahahaha!

The goal here and I approve is to unlock the full potential of CoStar's core business. By ditching the Homes.com albatross they're hoping to get back to that sweet sweet 30+ EBITDA multiple. This could result in an approximate $45 billion enterprise value versus around $30 billion today. More money more power...more evil opportunities! As a genius once said "One million dollars!" No wait. Wrong movie. My bad. "Throw me a frickin' bone here!" Yeah that's the ticket. So keep an eye on CoStar. Things are about to get interesting... or EEEEEEVIL! Mwahahaha!