FRONTLINES
Industry News
HomeStore.com IPO called success
THOUSAND OAKS, Calif.— HomeStore.com Inc. completed an initial public offering of stock in early August, generating $140 million in capital for the company that operates REALTOR.COM, NAR’s official Web site.
The company priced 7 million shares at $20 and closed its first day of trading at $22 3/4, roughly a 14 percent increase. Within a week the stock had risen above $30, and it traded above that mark through the balance of August.
The company’s stock performance is considered relatively strong by Wall Street analysts, who compare it favorably with the lackluster performance that has dogged many Internet stocks since midsummer, according to news reports.
There are two reasons for the upbeat response by investors, say analysts in the reports: HomeStore’s position as a market leader among online real estate sites, and the continuing strength of the housing market even as the interest rate environment gets rockier.
Clouding the picture is a $300 million suit filed by Cendant Corp., which accuses HomeStore of a breach of contract for its failure to negotiate equity participation for Cendant before the IPO. HomeStore denies the charge and has indicated that it may file a countersuit against Cendant.
In addition, news reports have alluded to a potential government antitrust investigation of HomeStore in connection with its exclusive listing agreements. Casting doubt on the reports, HomeStore and NAR officials say they have yet to be contacted by officials from either the U.S. Federal Trade Commission or the U.S. Department of Justice. They’re the federal agencies reportedly interested in the matter.
An FTC spokesperson wouldn’t confirm or deny the existence of an investigation but added that the subject of such an investigation is typically notified that it’s being investigated. “If there were an ongoing investigation, it’s something we’d communicate to attorneys at [HomeStore or] NAR,” the spokesperson told REALTOR® Magazine.
A Justice Department spokesperson also wouldn’t confirm or deny the existence of an investigation but added that entities are typically, though not always, told they’re being investigated.
Sex registry law dealt setback
BOSTON—A Massachusetts law requiring the names and addresses of sex offenders to be registered with the state and made accessible to the public was dealt a setback when the state Supreme Court ruled that the law violates offenders’ due process rights unless they’re first given a hearing.
The law, like similar laws throughout the country, is modeled after New Jersey’s Megan’s Law, which enables people to get information about sex offenders in their area.
The decision means that no one can be included on the registry until given a hearing before the registry’s oversight board.
Law enforcement officials in the state say the ruling will make it more difficult to protect children from sex offenders.
