Chit Chat Stocks - Zillow (ZG) with Brian Feroldi

Episode Date: September 16, 2021

We are joined by Brian Feroldi. Brian Feroldi is well known for spreading financial wellness through social media. In this episode, we discuss Zillow, the online real estate marketplace. Brian brings his expert knowledge of Zillow for a great discussion regarding the history and future of the company. Enjoy the show! Our Thursday Deep Dives are sponsored by Quartr, the new way of doing company research. Access conference calls, presentations, transcripts, and more for FREE on your mobile device. Download Quartr on the App Store here: https://apps.apple.com/us/app/quartr-investor-relations/id1552412128  Download Quartr on the Google Play Store here: https://play.google.com/store/apps/details?id=se.quartr.android  Subscribe to 7investing with the code "CCM": https://7investing.com/subscribe/aff/4/ Want updates on future shows and projects? Follow us on Twitter: https://twitter.com/chitchatmoney Interested in more of Brian's work? Follow him on Twitter: https://twitter.com/BrianFeroldi?s=20 Rather watch us on video? Subscribe to our YouTube channel: https://www.youtube.com/channel/UCG5Ni-SI-jyrEsoNUhqftNQ  Contact us: [e-mail]  Timestamps Zillow | (3:42) Investment Analysis | (19:56) Disclosure: Chit Chat Money hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Brett Schafer and Ryan Henderson are general partners and portfolio managers at Arch Capital. Arch Capital and its partners may hold securities discussed on this show. Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Money. Today is Thursday, September 16th. We recorded this interview a little bit early, but today we're talking Zillow with Brian for all day. This is our deep dive show. Before we get to the interview, we've got to talk about our friends, our sponsor, Quarter. It is the best investor relations app all around. We actually talked about this with Brian off the show, how great of an app it is. He uses it and he said it's just really convenient. it's really easy to listen to conference calls on the go. You can listen to them at two times speed, 1.5. I mean, maybe 2.5 if you're really smart. You can skip right to the Q&A. Yeah, there's just plenty of benefits to it. It's free to download. They have companies from all over

the world. You can add your watch list, prioritize, or you can hit request certain companies. And then you just go ahead and follow them. They have a bunch of more stuff coming out. They're young and they're growing. So they're launching new stuff all the time. At Twitter, it's at quarter underscore app. It's Q-U-A-R-T-R, no E, underscore app. So go ahead and follow them. Highlights from the interview. What did you like? We went over the iBuying process really comprehensively with Brian. That is something that investors have big questions on. I know the big quips that people have are that iBuying is zero margin and stuff like that. He explains the unit economics of that. That was very insightful. And I think as always, with these deep dive interviews,

You get an overview of the business, how it relates to the valuation and the stock price, how, you know, a little bit of the history of the business, a little bit of the management, and then kind of what investors or Brian himself is looking at going forward. Yeah, I think the word that comes to mind is optionality when you look at the business. And he talks about that. He talks about the strength of the core platform and how much that's offered them sort of as derivatives off of that. But without further ado, let's get to the interview.

Welcome to Chit Chat Money. On this show, hosts Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investing. As a quick reminder, Chit Chat Money is a CCM Media Group podcast. Ryan and Brett are also general partners at Arch Capital, and Arch Capital may have positions in the securities discussed in this podcast. Anything discussed on Chit Chat Money by Ryan or Brett or any other podcast guests is not formal advice or a recommendation. Now, please enjoy this episode. Okay, today we are welcomed by Brian Feroldi, now a recurring guest. I believe this might be the third time. Third time? Second time. I know for sure second time. What was the company we

talked about last time? Autodesk. Yes. We were on Autodesk about a year ago. We did that 25 stocks at Christmas last year. Yep. But today we are talking Zillow. Before we get to that, You recently started, maybe it wasn't that recent, but your YouTube page, how has that been going? Really good. I started it a couple of months ago just as an experiment, basically a repository place for me to throw all the interviews I did, such as this one right here. And it took off pretty well. And it's since become a place that we go to, to do stock analysis. And YouTube has become a phenomenal resource for teaching people how to do a stock analysis, like in real time, showing them how to open an SEC filing, how to look at a Glassdoor rating, et cetera. So I love

it. Yeah. I love how you guys open up the SEC filings because saying all the terms, some people that it can be overwhelming at first, but if you show where to actually look, that can be super helpful. All right. I guess we're getting into Zillow then. So just at a high level, why do you like the company and maybe explain what they do a little bit? I think that most people are probably familiar with Zillow. I mean, if you're a renter, or certainly if you are a homeowner, you've gotten those emails saying, here's what your house is worth. Here is your Zestimate. But I've been an investor in Zillow for at least six years now. And the reason I like it is it checks a ton of boxes in what I look for in a great investment. It has got a great brand.

I think almost every homeowner in America is familiar with the name Zillow. And if you're not, They have over 200 million people that visit their website, unique visitors to their website every month. So the odds are very good that your listeners know, but they are becoming the go-to real estate platform, anything related to the US housing market. So it's a platform that is used by buyers, used by sellers. If you're a renter, if you're looking to borrow, if you are an agent, they have built out a suite of products that all relate to the housing market, which is a multi-trillion dollar industry. And they have a lot of different elements of the business. Can you go into detail on some of the important ones and then how maybe do they make money?

Because I know people know how the consumer interacts with it, but then how does Zillow have a business on top of that? Yeah. It's kind of got a Facebook-esque feel to it where if you are a homeowner, there's no doubt you've been to Zillow's website to check out your home, maybe to update the page, but you are not the customer. They do have some tools that allow Zillow to monetize you. For instance, if you're interested in getting a mortgage or connected with an agent, they can monetize you that way. But you are really the product, the customer, the core legacy customer of Zillow has been agents. Real estate agents can go on Zillow and they can bid to have their name put next to properties in certain geographic zip codes.

And because of the extreme volume of consumers that are going to Zillow that are likely either looking to list their house or to buy a house, those are very, very high quality leads that agents are willing to pay up to get access to. So that is the historic way that Zillow made money. And that was the primary way that the company made money many, many years ago. Since then, they've offered a number of ancillary services on top of there. So you can get a mortgage through there. You can get a rental through there. They have closing services. And one of the most recent and exciting ones that they've gotten into is the iBuying service, where you can actually sell your home to Zillow. And that makes the home selling process

dramatically simpler. How do they make money on the renter's side? Because I know they own what is it, Trulia? Yeah, Zillow has been fairly acquisitive over the last couple of years. They have a number of properties under their name. Zillow is the obviously flagship product, but they also bought Trulia several years ago, which is a, that was a massive deal for the business. Zillow was number one, Trulia was number two by market share, and they combined under one one roof. They also own a couple of other companies like StreetEasy and Hotpads, but it's just kind of like, it's similar to like a rent.com website, where it's just a bunch of listings for rental properties. And if you go there and you book a property, Zill gets a commission

on that. Okay. Makes sense. And then what segment, I guess, do you think has the most promise for the business over the long run? Is it that iBuying or do you think their core platform is still going to kind of drive returns over the long term? In general, I'm a huge fan of investing in companies that have clear signs of optionality in them. And optionality is just a fancy way of saying businesses that can morph over time and open up new revenue opportunities for themselves that dramatically expand their market opportunity. So when I first invested in this business several years ago, the primary moneymaker was that premier agent business, again, where they were selling basically ads and connections to agents who are willing to pay up.

That is still a major revenue source for the company, and it still continues to grow at a rapid pace even today. What I like about this company is that is a high margin, dependable business. And the company has been taking all of the profits from that to build out these other businesses. And it's been getting into the iBuying business, which they call Zillow Offers. So if you are a homeowner and you've ever gone through the process of buying or selling a home, you know how unbelievably painful it is to try and get your home in housing market ready. Then even if you can find a buyer, which is a pain in the butt, you have to negotiate the closing date and the time. Then you have to move all your stuff out and you have to

find a new place to live, it's a nightmare. iBuying services, such as those offered by Zillow, Opendoor, and Redfin, really dramatically simplify that process where you, the homeowner, are getting basically a guaranteed sale price. You get to pick the closing date, and you don't have to fix your home. You don't have to move out. The whole entire process is made dramatically simpler. In exchange for that ease of use, you sell your house at a discount. And there are lots of people that have been proving willing to do that in exchange for the flexibility of not having to deal with any of the hassle that comes with selling a house.

This started as an experiment for Zillow several years ago, where they started to buy and sell houses in markets, basically sight unseen. They're just using their own Zestimate on it. And then they invest capital into that house to fix it up and then to relist it with their agents and see if they could turn it into a profitable business. That experiment seemed to have gone well enough that the company has since committed to expanding number of cities that it's offered dramatically. And they think that's going to be a major, major profit drive for the company moving forward. Yeah. That's what I was going to ask was,

do they just go city by city and put like refurbishing teams in those cities so that they can like fix them up? And it sounds like that's what they do. The question that comes to mind for me, it sounds like they have products or solutions span across the entire transaction process. How susceptible is the business? And I didn't jot this question down, but is it at risk of flowing with sort of the cycle of real estate in general? Like, is it something that does a lot better when real estate is hot? Or I mean, how does it compare to that macro environment, I guess? So that would be kind of like best case scenario for investors like 15 years from now. The only way that that could happen is that this is a remarkably successful product. Right now, this

is such a new business, and it's so minuscule when compared to the total volume of sales. I don't have the exact number in front of me, but I believe it's somewhere along the lines of 10 million houses are bought and sold in the US in a given year. Obviously, that fluctuates up and down, but for perspective, last quarter, Zillow purchased 3,800. So if they, what, 10 exit and then 10 exit again, maybe they'll be at 1%. So the chances of them, in order for them to be influenced by the general real estate market and the seasonality of it, they will have to substantially grow that business from here. Okay. Go ahead, Ryan. I was going to say, what about like the core platform, the agent partners? Is that susceptible

at all to like the ebbs and flows of the real estate market or is it kind of more recurring? Yeah, certainly. I mean, 2020 was a very disruptive year for the business. The housing market basically came to a standstill in the early part of the year and then it just skyrocketed in the back part of the year. Zillow, like many other companies in its position, stopped buying houses at that time. They basically paused it and they worked off their inventory. So what happened to their cashflow? It soared, right? They had the ability to have soaring cashflow. What's happening today is the exact reverse. They are now buying more houses in a quarter than they're selling. So what's happening to their cashflow? The exact opposite. It's pulled

back. So they can react to the market cycle that they see and what's happening. But both of those businesses are still small enough that they so far have been able to transcend the market cycle. But that is for sure something for investors to keep an eye on in the long term. The one question I have on the iBuying thing, because I know it's so important to the growth opportunity, you described how Zillow buys from the consumer, but how do they go back to selling it to someone else? I think they mentioned they have a loan or mortgage segment. Do they do some things to streamline that process as well? So that mortgage segment would be a service that they offer to potential buyers. So if you're going to buy one of Zillow's houses or really any

houses and you're looking for a mortgage broker, you can go to Zillow to get access to a number of mortgage companies to actually make that loan. But Zillow has tons of data on agents. And once they own this house, they can farm it out to their own agents, not those that work for them, but those are independent contractors. And for selling that house, the agent gets a commission on it just the same way they would for selling any other house. What's pretty exciting about that business is when it was very, very young, a couple of years ago, the economics were terrible. They were upside down economics, which makes sense given that the company was still kind of scaling it up. But as of the most recent quarter, the numbers are starting to look good. So in the

last quarter, the average house that they sold for $370,000, they bought that house for $322,000. So that's a $48,000 delta that they have on the gross profit line. Now, total costs for renovation, for selling, for holding, for interest costs, all total costs were $28,000. So that gave them a 5% net margin on their average home sale already. That's pretty exciting that they're already at that stage, given how early they are. And there is potential for them to even increase those numbers of time as scale continues to grow.

But to me, as a Zillow investor, it's exciting that that business is finally starting to become profitable because for years it's been a drain. Does that kind of have the weird accounting effect where they have to record the sale as revenue, even though it's basically the revenue, I guess, is that margin or the separation or the differential there? I'm pretty sure they report the entire sale of the house as revenue and the purchase price would be going into as cost of revenue. So they're not just reporting the gross profit, they are reporting both. So because of the nature of that business and how different the margin profile is of its core business, funny things are happening to this company's overall income statement when you kind of look at it on a consolidated basis. Normally, I don't like to invest in businesses that are seeing their gross margin decline rapidly, but that's exactly what we're having here.

The company is, that's no secret, right? That is the nature of the business. And management has said that it's going to start emphasizing gross profit moving forward, similar to what we've seen at like Square because of their Bitcoin adventures. They're really saying, focus on gross profit. Revenue is going to be all over the place. I think that that makes sense. So again, normally I don't like investing in companies with declining gross profits, but I understand the reason why it's happening here. Right. That makes total sense. And let's move to their positioning versus competitors. I know Redfin is one that people know a lot. There's Opendoor, they got a ton of money through SPAC,

I believe, and there's Compass as well. How does Zillow fit versus them? What do you think their positioning is against all those guys? So this is something I learned when I listened to an interview that the CEO and founder, Rich Barton, did that really made me excited as an investor. There's no doubt that the iBuying industry is growing in importance. And Zillow is not the only player here. You just named three other major competitors. And I would say that of the ones, Opendoor and Redfin are the two that are well-capitalized enough to be worried about. But one thing that's interesting about this new business is that it's incredibly capital intensive. I mean, incredibly capital intensive. They're shelling out hundreds of thousands of

for one house inventory. And then they're doing this times thousands and potentially tens or even hundreds of thousands in the near future. That alone is a barrier to entry for a potential new entrance, just to have access to that much capital. So I think that puts companies like Zillow, like Redfin, and like Opendoor in a good position moving forward. If they can reach scale, it's going to be awfully hard for anybody else to break into that market. But overall with the competition, I'll say two things. One, the entire iBuying industry is so minusculely small when compared to the total volume of housing sales. I think this is one category where there won't be one winner. I think all three of them, there's plenty of opportunity for all three of them to

grow and win. But two, the thing that really struck home with me is what Rich Barton said. He says, Zillow has an unfair advantage. We have the most traffic in the industry by far. So we can take all that traffic that we get from our core Zillow properties, which again is over 200 million monthly active users. In fact, it was 245 million a month, unique visitors in July alone. That's like 70% of the entire American population that visited Zillow.com in July of this year, but that gives them a lower customer acquisition cost than anybody else. yeah i read somewhere that they uh the term zillow is uh searched for more than real estate yes is that on the 10k isn't that crazy isn't that crazy uh reminds me of like dual dual lingo

i recently did uh some research on dual lingo and the term uh dual lingo was learned was searched more than the term learn spanish huh so that's that's a sign of a good brand yeah it sounds like that's a huge advantage. Why couldn't someone replicate that? Or could someone, or I guess maybe a better question is, would someone replicate it? Potentially. I mean, if you've been following Redfin at all, there's no doubt that they are following in Zillow's footsteps. They have a slightly different business model where they employ the agents directly, and they seem to have a nice offering. And every month they report their market share, and that's continually stepping up over time. So those two businesses are comparable.

But when you think about what it takes to get access to all of the data, keep in mind that there are multiple listing services or MLSs all over the United States. And just buying and aggregating the data from all of them is a bit of a headache. Companies like Zillow have been doing this now for 15 years. So I would say that they have a data advantage. But in the long term, I think their most sustainable advantage is just their brand name. It's just synonymous with the category. Same way it would be like, okay, if we started our own social network, how the heck are we going to compete with Facebook and Instagram?

It would have to be something spectacularly different. And I just have a hard time seeing another company doing that. Does Zillow have, you said, I know they partner with the agents, but do they have their own agents at all? Or is it all kind of outsourced to those partner agents? I'm almost positive it's outsourced to those partner agents. I know that that's different than Redfin. Redfin employs the agents directly, and they are essentially employees. Zillow does, to my understanding, Zillow does not do that.

I think we should have a quick ad break, and then we've got more questions on the back half. Step up the ladder. I want Cormac dead. Starring Tom Hardy, Pierce Brosnan, and Helen Mirren. Do I have to do everything myself? You want him out? I'll give you him out! Mobland. New season hits September 18th on Paramount+. This episode is brought to you by KPMG.

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And in the morning, get fresh waffles with their free bright side breakfast. Or squeeze in a workout at their fitness center. Either way, you're ready to conquer the day. Tonight, La Quinta. Tomorrow, you triumph. Book your stay at LQ.com. Okay, welcome back in. Next thing I kind of wanted to hit on is just the management and ownership.

You mentioned Rich Barton briefly. I know he's the CEO. Is he also the founder? And then I guess just generally, what do you think of him as the CEO? Is it important to your investment thesis here? Rich Barton gets two thumbs up from me. For those that are unfamiliar with Rich Barton, he founded another company that you may have heard of, Expedia.

So he has a history of founding successful internet-based companies that disrupt industries. In Expedia's case, it was travel. In Zillow's case, it's going to be real estate. So he was already rich prior to founding Zillow. And he still has a substantial stake in the business. As of the most recent proxy report, he owns 7.5 million shares, which at current prices is over $300 million. This is a company that has multiple share classes. He has about 30% voting power just himself. Another important executive to think about is a guy named Lloyd Frick. He has also been

at the company for a long time. He's the company's executive chairman. He himself owns 5.6 million shares, which is also worth over $500 million. But like Barton, he also has super voting shares. So he has a 20% voting power. So those two executives who have been in the business for a long, long, long time control about half of the total voting power. And with things like that, I checked, okay, does he have skin in the game? Yes. Does he have a history of doing well? Well, if you followed Zillow stock since it came public, you probably have a smile on your face. And then how do his employees like him? Well, he's got a 96% CEO approval rating and Zillow itself gets 4.3 stars out of five. So Rich Barton checks a lot of boxes for me.

Okay. And what about, I guess, how big is the business? Do you want to talk about the valuation and the financials a little bit just to give the listeners some context? Is it growing? And then just what does profitability look like for them? Yeah. So Zillow is still in high growth mode. Obviously, 2020 was a weird comparison year just based on the nature of the business. And the other thing that investors have to keep in mind is the margin profile of the business is changing dramatically. So revenue growth is going to be extreme as the iBuying business continues to ramp up. For example, next year, Wall Street's expecting almost 50% revenue growth for the business.

However, it's really going to be, well, how fast is gross profit growing that we as investors should really focus on and care about? Now, because of that and because of the nature of the iBuying business, the price to sales ratio is going to be misleading on this company. You can't just take it and compare it to like a high growth SaaS company and say, well, those two are comparable. because again, the margin here is going down and trending probably to settle around, I don't know, somewhere around 20, 30% in the grand scheme of things. Whereas you compare that to a high growth SaaS company with an 80% gross margin, of course, they're going to trade at different price to sales ratios based on that. But if you look at the price to sales ratio, it's currently under six, which is reasonable, I would say. But the price to earnings ratio, the company does have a PE

ratio that you can actually look at. Its forward PE ratio right now is about 63. Once again, I would argue that this company is not yet fully optimized for long-term profitability. So that number is a bit inflated compared to what the real earnings power of this business is. But right now, I don't think this is insanely expensive. And how does their cash flow deviate? So when they're a net buyer on Zillow offers, does that really tank their cash flow? Am I getting that right? Yes. Okay. Oh yeah. This is a business that's going to be yet another case study in the difference between net income and free cashflow. And it's really based around the iBuying business. Again, the iBuying business is incredibly capital intensive. So last quarter,

they bought 1,800 more homes than they sold. So that's 1,800 times, what was their purchase price, $322,000, that's a lot of cash that's going out the door. Normally, that really bothers me. I don't like seeing a big discrepancy between free cash flow and net income. And when choosing between the two, I'll take free cash flow every single time. I think offsetting that is the fact that if Zillow wanted to become free cash flow positive at any time, it could. And we saw exactly that happened in Q1 and Q2 of 2020. When the world was falling apart, it said, all right, we're stopping buying homes. And then free cash flow just absolutely skyrocketed. But again, that is something that I think is a long-term barrier to entry for anybody else that wants

to get into this business. You need a ton of capital to do so. Right. And one question I think we have on the offers is, do they give any color on the turnaround time between buying and selling? Because if that can compress over time, that would theoretically help the working capital improve. Yes. I don't know that off the top of my head, but I think that's something that you could look up. When I hear about the Zillow offers business and just the iBuying in general, the first thing that comes to mind is they're holding essentially a bunch of homes on their balance sheet at one time. Do you think that adds some risk to the business? Or I guess we just talked about- Or what are the risks?

Yeah. What are the risks associated with that? Yeah. The risks is that Zillow offers doesn't work out. I mean, make no mistake. This is a massive business model shift and the company hasn't yet proven out over a long period of time that it can work. In some ways, it reminds me of Netflix a few years ago when it really started to invest heavily in its own streaming and internal production capabilities, we saw a massive discrepancy for years between net income and free cashflow because doing so was incredibly capital intensive. Zillow is still in that early part of the cycle where it's probably going to be free cashflow negative for quite some time as it ramps up. I hope eventually it reaches a tipping point where it has enough scale where that cashflow

balances out and then it can grow itself. But again, that's the reason why I like this business versus Redfin and versus Opendoor is it has that cash cow, internet media and technology, the premier agent business that can kind of fund all the development, all the build-out of the Zillow offers business. But make no mistake, this company does not have a long operating history of making the iBias business work. That is a massive risk for investors. is the premier agent business or the imt part is that still growing yes okay all right all right and uh okay one more do okay you talk about i buying that's the one that's you know most investors are aware of that's the big growth opportunity are there any other segments of

the business that investors should be aware of before investing in this company yeah all all of the companies all the companies revenue sources are all in in growth mode and if you listen to management, they believe that their internet media and technology business still can grow at above average rate for years and years and years to come. They think their total addressable market opportunity there is far bigger than what they've captured already. But all those other high margin businesses that they have and they're scaling out, the real plan there is take those profits and use it to fund Zillow offers. That is the plan. The early signs are that plan is working, but wow, there's no guarantees that it will continue to work into the future.

So one question that comes to mind then for me is that, let's say the three well-capitalized players like Opendoor, Redfin, and Zillow, they all start to go full growth mode on the iBuying process. Does that start to, I think the part that excites people is that they can buy these homes at a discount and then obviously sell them for more. Would that start to go away with competitive offerings if Opendoor and Redfin are also competing in the same market? Or is it kind of a big enough opportunity that it doesn't matter? I would say the latter is what's happening right now. The opportunity itself is so big that it doesn't matter. But then again, if you were going to be selling your home, I know I, for one, would certainly want pricing on all three of the

sites. I mean, that is a tens of thousands of dollars decision between them. So there will be some competition between each of them. Again, I think that Zillow has the advantage in that it has the lowest customer acquisition costs and it's got the most traffic, so it can drive the most traffic to its iBuying sites. But again, that's something for investors to watch. All right. Do we want to, do you have any others or should we go to the checklist one? No. Well, yeah. How to do on your checklist. So I have a pretty detailed checklist that I take every company through. And if a company's scores below essentially 70. I almost, I ignore it between 70 and 80 is really good. Anything over

80 is why don't I own this? A few years ago when I did this, Zillow was just a business focused on the premier agent business. And at that time it was in the low 80s. And that was like, why don't I own this? Hence why I became a shareholder. More recently with the business model shift and with the dynamics around free cashflow, it's lowered its quality rating to being, last check it was a 77 the last time I did this. So this is still in my investable, highly investable category, but it's riskier, I think today than it was a few years ago. Right. And you've done a video on the checklist, right? So people can know how, you know, all the inputs of that. Yes. We have done many videos on taking companies through the checklist. So

check out my YouTube channel if that interests you. All right. So Zillow, I don't know if you have it in front of you, but what were some of the knocks on the business? What dropped it down to a 77? The biggest one there was a shift in free cash flow. So they were formerly producing lots of free cash flow and growing it rapidly. Now, because of the dynamics of the iBuying business, their free cash flow is negative. The other thing that I don't like is the company's the dilution rate has been pretty high on this business. Part of that is due to their acquisition strategy and some of the acquisitions they've made in their past.

Another part is just stock-based compensation. Those are the two biggest categories that I knocked them for on this round, but still, this company still checks a lot of boxes for me. Yeah. So what's in your mind, they're doing this business model transition. At this time period, what's the biggest threat to the business? What could go wrong for investors over the next three to five years or just as shareholders? Yeah. Make no mistake. A bet on Zillow today is a bet on Zillow offers, period. For this investment to work out, the company has to continually grow that business and do so while producing profits. The recent signs suggest that the economics for that business are starting to become favorable, at least on a net income

basis, but they are going to be pumping tons and tons of cashflow from operations into that business. And to your point, they might even be raising capital again. So the last time that I see that they did that was May of last year, which again was in the middle of the world falling apart and real estate being upside down. So that makes this a high quality yet risky stock because if this thing is going to multi-bag, Zillow offers worked out. If it's going to underperform, it's because Zillow offers didn't work out, period. All right. That's a good way to wrap up, Yeah, I think that's all our questions. Where can listeners find you? What's the YouTube channel called? YouTube channel is called Brian Feroldi, and I'm most active on Twitter, which is at

Brian Feroldi. That's right. Great graphics for anyone who's trying to learn about the stock market. All right. Well, that's going to do it. I'm going to try to hit the disclosure without butchering it here. So we are not financial advisors. Anything we say or discuss here on Chitchat money is not formal advice or a recommendation. We are, however, general partners at Arch Capital, so clients may have positions in the securities discussed in this podcast. Thank you for listening. We'll see you next time.

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