Trulia Surges to Record as Home Prices Gain: San Francisco MoverKarl Baker
Trulia Inc., the operator of a residential-property listings website, surged to a record on optimism that gains in U.S. home prices would help boost advertising revenue.
The stock advanced 4.7 percent to $24.50 at the close in New York. The shares have increased 44 percent since an initial public offering in September.
Trulia is taking on larger rival Zillow Inc., which sold shares to the public in July 2011, by developing smartphone applications designed to reach prospective homebuyers on the move. Revenue may be bolstered by U.S. home prices, which according to a report today from the Federal Housing Finance Agency climbed 5.6 percent in the 12 months through November as buyers competed for a dwindling inventory of properties.
“Sellers want to reach consumers in every way,” Kerry Rice, an analyst at Needham & Co., said in an interview. “That means more agents will advertise on Trulia.”
Real estate professionals subscribe to Trulia’s service as a way to reach potential homebuyers, and they can also place ads on the company’s website and mobile application.
Home prices have been climbing as growing employment and low borrowing costs fuel demand. Sales of existing homes fell 1 percent in December to a 4.94 million annual rate, restrained by the tight supply of available properties, figures from the National Association of Realtors showed yesterday.
Shares of Trulia may also be gaining on speculation that Zillow could be acquired by Google Inc., operator of the world’s largest search engine, Rice said.
“If you’re interested in Zillow, you’re likely interested in Trulia because they do the same thing,” Rice said.
Google or another buyer might offer as much as $45 a share for Zillow, Dan Kurnos, an analyst at Benchmark Co., said in an interview.
Katelin Todhunter-Gerberg, a spokeswoman for Google, declined to comment, as did Katie Curnutte, a spokeswoman for Zillow. Daisy Kong, a spokeswoman for Trulia, didn’t respond to a request for comment.
Shares of Zillow advanced 3.3 percent to $34.69, and have increased 25 percent this year. Zillow, based in Seattle, sold 3.46 million shares at $20 apiece in an IPO in July 2011.
Trulia, based in San Francisco, sold 6 million shares at $17 apiece in its IPO last year.