CoStar Dodges Hedge Fund Investors

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CoStar, one of the larger data and information services companies, got new board members as they side-stepped a confrontation with Third Point & DE Shaw.

CoStar has historically made acquisitions as they expand their reach on real estate data. From Homes.com to Matterport to ResearchHub to Ag-Analytics and many, many more. They have done a good job of grabbing rich data assets and expanding globally. The question now is, are they deploying capital efficiently? Is management properly aligned with investors? You have to applaud them for making moves and making acquisitions to continue to grow. The share price and chart as you can see from Fincaht.io below, is not exactly exciting. One could argue that the price of the stock is as disappointing as the stock chart of $FDS ( ▲ 0.82% ) if not worse.

So what’s next for CoStar? With the hedge funds now fully involved, one would hope smarter acquisitions, maybe some divestitures, and a stock price that goes up and to the right.

The bigger question is now that you have two big hedge funds in $CSGP ( ▼ 10.31% ) , what other data and information services companies do they have in their idea funnel? Or are they already engaging with other companies behind closed doors? Do we see letters of mass destruction get released on other public data companies? Are management at the largest data companies planning to hobnob in the Hamptons this year? - I hope not if their stock price and investor alignment aren’t rock solid.

Factset? London Stock Exchange? Morningstar? Moodys? I have laid out ideas on almost all of these in the past. It might just be a wake-up call for management at these companies that activist investors are looking.