Zillow investor sues over Redfin rental syndication deal

Zillow is facing yet another lawsuit related to its multifamily rental syndication deal with Redfin, first announced in February 2025. The listing portal giant is already facing a legal challenge from the Federal Trade Commission (FTC) and attorneys general in five states, who are claiming that the two firms conspired to eliminate competition in the rental listing space and that their syndication agreement — under which Zillow paid Redfin $100 million — violates antitrust laws. 

In a new lawsuit filed law Tuesday against Zillow, as well as the firm’s CEO Jeremy Wacksman and CFO Jeremy Hofmann, investor Matt Breidert alleges that Zillow misled investors about its February 2025 agreement with Redfin involving multifamily rental listings. According to the complaint, Zillow described the deal as a “partnership,” but Breidert later learned, through the FTC’s lawsuit, that regulators viewed it as something much closer to an acquisition or market-exit agreement that allegedly eliminated a competitor.

The lawsuit claims that Zillow failed to adequately disclose the antitrust risks associated with the agreement and that investors suffered losses when those risks became public.

“Zillow’s agreement with Redfin was not a ‘partnership,’ but rather an acquisition of Redfin’s business; as a result of the Redfin Agreement, Zillow faced a materially heightened risk of regulatory scrutiny and liability under federal antitrust laws,” the complaint states. 

In an emailed statement, a Zillow spokesperson wrote that the firm’s  “rental listings partnership with Redfin is pro-competitive and pro-consumer, and we remain confident in that position.” 

“We stand by our business model and will vigorously defend against these allegations,” the spokesperson added.

According to the complaint, Zillow’s Class C share price fell 4.33% on September 30, 2025, when the FTC filed its lawsuit, and another 4.63% the following day. Additionally, Class A shares allegedly fell by 4.5% on September 30, and 4.37% the next day. 

The complaint also claims that share prices fell again in February 2026 after Zillow Group’s fourth quarter 2025 earnings call when Hofmann disclosed “ongoing elevated legal expenses” and warned of a roughly 200-basis-point EBITDA-margin headwind, with Class C shares allegedly falling 17.12% and Class A shares allegedly falling 16.5%.

Breidert is seeking class action status for all persons or entities who purchased or otherwise acquired Class A or Class C Zillow common stock between February 11, 2025 and May 7, 2026, and has demanded damages and a jury trial.