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Zillow Shuts Home-Flipping Business After Racking Up Losses

  • Decision comes after company overpaid for homes across U.S.
  • Widening losses in Zillow Offers unit leads to big writedowns
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WATCH: Zillow will stop flipping homes.Source: Bloomberg
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Zillow Group Inc. is pulling the plug on its tech-powered home-flipping operation, after an ambitious effort to transform the company collapsed when its vaunted pricing algorithms proved unequal to the task.

The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 in late trading.