Exclusive: Third Point Targets CoStar in New Activist Campaign, Sources Reveal

• Third Point wants CoStar to exit or sell its residential business (Homes.com/Apartments.com) and refocus on its profitable CoStar Suite commercial real estate data platform
• CoStar's stock has fallen 27% over five years while the S&P 500 surged 94%; Loeb privately criticized CEO Andy Florance's bonuses as the 'costliest participation award' he has seen
• The campaign follows the expiration of a standstill agreement signed last year; Third Point ranks among CoStar's 15 largest investors and previously secured board seats in 2024 alongside DE Shaw

Summary

Key Development: Billionaire investor Dan Loeb's Third Point has launched its first activist campaign in three years, targeting CoStar Group ($28 billion market cap), owner of Apartments.com and Homes.com. The hedge fund, which oversees $24 billion in assets and ranks among CoStar's 15 largest investors, is preparing to nominate multiple directors to the company's eight-person board.

Primary Demands:

• Replace majority of current board directors to impose financial discipline
• Focus on core commercial real estate business (CoStar Suite)
• Exit or sell residential real estate operations
• Cut costs, including CEO Andy Florance's compensation
• Improve pricing strategy and target international customers

Performance Context: CoStar's stock has dropped 27% over five years while the S&P 500 surged 94%. Loeb has privately criticized Florance's strategy of spending billions to compete with market leader Zillow Group through Homes.com, calling the CEO's bonuses the "costliest participation award" he's ever seen.

Recent Developments: CoStar announced plans to reduce Homes.com investment by $100 million annually until 2030 and unveiled a $1.5 billion stock buyback. In 2025, Third Point and DE Shaw previously secured board settlements, adding three new directors including former S&P Global and Disney executives, plus creating a capital allocation committee. However, Loeb remains frustrated by lack of progress.

Timing: The campaign launches after a standstill agreement (preventing public criticism) expired at midnight on January 27. This reflects broader market trends of increased activist investor activity urging corporate restructuring and asset sales.