As Coastal Housing Markets Cool, 2017 IPO Redfin Is Worthy Of A Watchful Eye | Value Investing News

As Coastal Housing Markets Cool, 2017 IPO Redfin Is Worthy Of A Watchful Eye

  • The company has been expanding its 1% sales commission structure rapidly, which can cut home sellers commission expense by 33% (4% vs 6%).
  • With those same markets now showing clear home price deceleration and inventory stockpiling, RDFN should see pressure on its near-term financial results, and likely similar headwinds for the publicly traded shares.
  • That cash is crucial, as the company is purposely losing money now to grow quickly (cash burn has been in the $20-$30 million per year range).
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