CoStar and D.E. Shaw Trade Fresh Blows Over Homes.com Disclosure

CoStar Group’s increasingly public fight with activist investors has entered a new phase, this time centred on how the company reports the performance of Homes.com.

In a new open letter to the board, D.E. Shaw accuses CoStar of burying Homes.com inside a broader Residential reporting segment that, as of its Q4 reporting, now also includes the larger, more profitable Apartments.com business. The hedge fund said the change “effectively buries the poor financial results of Homes.com” and described it as a “hide the ball” exercise that reduces accountability just as investor pressure is intensifying.

D.E. Shaw also took aim at CoStar’s decision to stop disclosing net new bookings for Homes.com, a metric investors had used to judge whether the portal’s expensive push in US residential was gaining traction. In the letter, the firm argued that “there can be no accountability without transparency” and asked bluntly: “What is CoStar trying to hide?”

The criticism lands in the middle of a wider revolt over CoStar’s residential strategy. Since late January, both Third Point and D.E. Shaw have attacked the company’s multibillion-dollar Homes.com investment, arguing it has depressed margins, distracted management from the core commercial business and helped drag the stock towards multi-year lows.

CoStar, unsurprisingly, is not having it. In a response issued on 11 March, the company said D.E. Shaw’s claims were “misleading” and insisted Homes.com had never been reported as a separate segment in the first place. CoStar said the shift from geographic to product-based segments was designed to better reflect how it runs the business, and argued the new structure actually provides “more transparency” through audited revenue and EBITDA disclosure for both Residential and Commercial.

The Washington-based real estate giant's response statement was not purely defensive and alluded to concerns behind the activist investor's criticisms. “If D. E. Shaw is worried about transparency, it should start with itself,” CoStar said, adding that the fund had not disclosed its full economic exposure to the company

"Public filings suggest D. E. Shaw owns just 0.22% of CoStar Group’s common stock, but almost 4x that value in CoStar Group competitors who would directly benefit from D. E. Shaw’s push for us to abandon Homes.com and eliminate the fastest growing residential real estate platform in the industry. CoStar Group stockholders should ask if D. E. Shaw’s real agenda is to unlock value through its investment in CoStar Group or in our competitors at the expense of CoStar Group stockholders."

In CoStar’s Q4 2025 results, Residential revenue rose 35% year-on-year to $429 million, with Apartments.com contributing $308 million of that total, up 11%, while Domain added $73 million in quarterly revenue. The company said that Homes.com now has more than 31,000 paying agents and is generating nearly $100 million in annual run-rate revenue, but the switch to portfolio-based segment reporting means investors can no longer clearly isolate Homes.com’s standalone quarterly performance.