Third Point Pulls Out of CoStar Proxy Battle

Third Point, a hedge fund run by billionaire Daniel Loeb, decided to abandon its plan to launch a proxy fight against CoStar Group. The firm sold all of its shares in the real‑estate data company, which also owns Apartments. com and Homes. com. In a letter to investors, Loeb explained that the company’s strategy had changed and that his original investment thesis no longer applied. The fund had been a major shareholder, ranking among CoStar’s top fifteen investors. Earlier this year, Third Point announced it would try to replace the board and force a shift in focus toward the company’s core commercial services. The move came after CoStar’s stock price fell sharply, dropping from about $66 a share in January to just over $36 at the end of trading on Friday. The company’s market value fell from roughly $28 billion to $15. 3 billion during that period.

Loeb had argued that the board and CEO Andy Florance needed to cut costs, including reducing executive pay, and that the company should divest or shut down its residential arm. He criticized Florance’s heavy investment in Homes. com and other online classifieds, claiming it drained the company’s operating income. Third Point had also suggested that CoStar’s focus on residential real estate was hurting its overall performance. Other investors were not far behind. Hedge fund D. E. Shaw also pushed for board changes, citing losses from the Homes. com investment. Both funds reached agreements with CoStar in 2025, allowing new directors to join the board. After evaluating the situation, Third Point concluded that its goals could not be achieved through a proxy fight. The fund’s exit reflects the challenges activist investors face when corporate strategy shifts and market conditions evolve rapidly.

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