Below is a note from CEO Keith McCullough on why we're adding Redfin Corp (RDFN) to the short side of Investing Ideas:
Every once in a while we get lucky and the Old Wall slaps a "buy" on something we didn't think would bounce back...
That's what happened today with one of Josh Steiner's favorite US Housing Shorts of 2018, Redfin (RDFN).
Here's Steiner and Drake's Institutional Research take on the recent quarter (that rightfully crushed the stock!):
- Core top line growth has slowed considerably since the IPO and is projected to slow further in 4Q18.
- Loss guidance for 4Q is 3x what the Street was expecting (18-20 cents vs expectations for 6 cents).
- The Housing market weakened further just recently with bookings growth for Nov/Dec down from what was seen in Sep/Oct.
- The company plans to quadruple ad spend in 2019, up from $12mn in 2018 to $40-60mn in 2019.
