Third Point abandons CoStar investment in wake of squabble 

One of CoStar Group's largest and most vocal investors has opted to sell off its shares following a public disagreement over the company's handling of its portal, Homes.com, and the alleged failure of its board to hold management accountable.

Cutting ties: The hedge fund and activist investor Third Point has sold its ownership stake in CoStar Group, according to a letter sent to investors by Third Point CEO Daniel Loeb. Reuters, which obtained the letter on Friday, was first to report the news.

The total amount of the shares sold is unclear, but Third Point has been ranked in the past as one of CoStar's top 15 investors. As of reporting on Feb. 17, 2026, Third Point held 3.165 million shares in CoStar, representing about $212.82 million in market value and about 0.75% of CoStar Group's ownership, according to MarketBeat.

Real Estate News has reached out to Third Point for comment.

CoStar's response: The commercial real estate giant said in a statement that the company is looking toward the future.

"CoStar Group is focused on executing our proven playbook to build on our momentum as we enter our next chapter of margin expansion and profitable growth," a Costar Group spokesperson said. 

"We look forward to continuing to engage with stockholders as we continue to unlock the tremendous value of our digital ecosystem."

How it started: In late January, Third Point published a letter to CoStar's board of directors calling for a significant pullback in CoStar's investment in residential real estate portal Homes.com. The letter came a few weeks after CoStar announced plans to cut spending on Homes.com by 35% in 2026, suggesting Third Point did not consider those reductions to be sufficient.

CEO Loeb criticized CoStar's spending on the portal as frivolous and an effort that produced very little returns. The letter called out the roughly $5 billion CoStar had invested into residential real estate over the course of five years, and said the focus on the space had distracted management from the company's core business of commercial real estate.

Third Point also zeroed in on CoStar Group CEO Andy Florance's compensation, which it characterized as inflated given the company's poor stock performance, which had fallen by more than 25% over the last five years.

Shortly after Third Point penned its letter to the board, investor D.E. Shaw joined the hedge fund in the pressure campaign against CoStar by writing its own letter calling for board changes and an exit from Homes.com.

CoStar's recent adjustments: Following the barrage of investor criticism, CoStar group confirmed in mid-February it had undergone a round of layoffs in an attempt to cut costs and realign its operations with strategic priorities. 

CoStar did not specify which departments were most impacted by the layoffs, but according to public posts on LinkedIn, many employees were part of photo and video production teams at CoStar and content teams at Homes.com.

At the time, CoStar said the decision was "not taken lightly" but was a necessary step in the company's next growth phase.

Earlier in February, CoStar said in a response to D.E. Shaw's letter that it does not expect Homes.com to become profitable until 2030, and that it will significantly decrease its investment in the portal in upcoming years. It has also added three new independent directors to its board and formed a Capital Allocation Committee to review the company's capital structure.