Redfin Stock Pops After Announcing $608 Million Acquisition of RentPath

What happened

Shares of real estate technology company Redfin (NASDAQ: RDFN) popped on Friday after the company announced it's acquiring RentPath for $608 million. As of 2:30 p.m. EST, the stock was up 11%.

So what

RentPath owns domains like and, helping people find rental properties. Redfin serves this part of the real estate market as well. However, Redfin primarily facilitates the buying and selling of homes. By acquiring RentPath, it expands its audience in the important rental market.

A businesswoman draws an upwards arrow over a rising bar chart displayed on a transparent touchscreen.

Image source: Getty Images.

While the deal has been approved by the boards at both Redfin and RentPath, management has yet to disclose how it will be financed. Perhaps it's something the company will address when reporting quarterly earnings next week.

Now what

This was Redfin's biggest acquisition to date. To be sure, considering Redfin's market capitalization is under $10 billion, it's a bold move. Now it will start working on the challenging task of integrating RentPath's operations into its company. It also likely needs to improve the economics of RentPath's business -- RentPath filed for Chapter 11 bankruptcy protection in 2020.

Redfin is scheduled to report fourth-quarter earnings on Feb. 24. The company guided for revenue between $226 million and $233 million, which would be flat to slightly down when compared to the fourth quarter of last year. However, management does expect to have net income of $2 million to $5 million, improving from last year's net loss of $7.8 million.

Redfin stock is up over 200% from this time last year, showing just how high expectations are getting for investors. These heightened expectations highlight how important hitting guidance will be.

10 stocks we like better than Redfin
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Redfin wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of November 20, 2020

Jon Quast has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Redfin. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More