Redfin CEO offers candid take on Rocket acquisition
In an interview with the Puget Sound Business Journal, Glenn Kelman said the brokerage would have ‘been stripped for parts’ if bought by a different company.
It appears Redfin President and CEO Glenn Kelman wasn't excited about the alternatives the company faced before agreeing to be acquired by Rocket.
In an interview with the Seattle-based Puget Sound Business Journal, Kelman said that if Redfin had been sold to any other company, it would have "been stripped for parts."
"That company would have wanted the website, but nothing else," Kelman told the Business Journal on Wednesday, March 12.
Kelman also said in the interview that negotiations with Rocket first started in November, picking up after the holidays. He was intrigued with the idea of combining Rocket's financial data with Redfin's home search data to provide better suggestions for customers.
Stock market reaction: The $1.75 billion sale, which was announced March 10, has initially been met with approval from investors. Despite the overall turmoil in the stock market, Redfin's stock has nearly doubled from $5.82 a share to $10.50 over the past three days. Rocket's stock initially dropped from $15.80 to $13.91 after the announcement, but has climbed to $14.50 at the end of trading on March 13.
The acquisition is expected to have a significant impact in the real estate industry's quest for a self-contained, end-to-end transaction experience.
Pairing a huge lending company with a real estate brokerage that offers listings, agents and title services allows Rocket and Redfin more opportunities to keep more buyers, sellers and homeowners within an integrated network. It also provides some competition for Zillow, which is trying to reach the same goal with its "super app" strategy.
Zillow reaction: For its part, Zillow appears to be ready for the increased competition. In a statement to Geekwire, a Zillow spokesperson said it will benefit everyone.
"We believe further investment in connection, tech and transparency is good for consumers, the industry as a whole, and also for Zillow," the company said. "Through our products, services and partnerships — including our existing collaborations with Redfin — we remain committed to delivering that experience for renters, buyers, sellers and industry professionals."