Key Takeaways
- • Third Point, led by billionaire Dan Loeb, has completely exited its stake in CoStar Group (NASDAQ: CSGP) and abandoned plans for a proxy fight, according to a letter to investors dated April 10, 2026.
- • Loeb stated in the investor letter that Third Point "no longer believes that our original thesis holds true today" and has "disposed of our position in its entirety," citing the continued strategic missteps despite activist pressure.
- • CoStar's stock has declined more than 50% over the past 12 months, undermining Third Point's core investment thesis that focused on pressuring the company to refocus on commercial real estate and divest or scale back its residential segment, including Homes.com.
- • Third Point had criticized CoStar CEO Andy Florance for what Loeb characterized as a "reckless drain" on operating income through continued investment in Homes.com and related acquisitions, but the activist campaign failed to gain sufficient traction.
- • The exit marks a significant retreat for Third Point after it had signaled a potential proxy fight earlier in 2026, which temporarily lifted CoStar shares in January before the broader decline accelerated.
Summary
Activist hedge fund Third Point has formally exited its entire stake in CoStar Group and abandoned its proxy fight campaign, according to a letter from founder Dan Loeb to investors disclosed on April 10, 2026. The decision represents a strategic retreat for the New York-based activist investor after months of pressure on the real estate data company's leadership to refocus on its core commercial business and divest or significantly scale back its residential operations, particularly Homes.com.
Loeb's investor letter emphasized that the fund no longer believes its original investment thesis remains viable. "We no longer believe that our original thesis holds true today and have disposed of our position in its entirety," the billionaire investor wrote. Third Point had previously advocated for CoStar to abandon or materially reduce its investment in the residential segment, arguing that the company's diversification strategy was destroying shareholder value rather than creating it. The hedge fund never publicly disclosed the size of its stake, though it had ranked among CoStar's top 15 shareholders at the height of the activist campaign.
The activist campaign centered on criticism of CEO Andy Florance's strategic direction, with Loeb characterizing the ongoing investment in Homes.com as a "reckless drain" on operating income. Despite Third Point's initial success in drawing attention to the issue—the activist push helped lift CoStar shares in January 2026—the stock has since declined more than 50% over the trailing 12-month period, undermining the fund's fundamental thesis. CoStar, headquartered in Washington, D.C., operates major platforms including Apartments.com and Homes.com as part of its expansion from its historical focus on commercial real estate data and analytics.
The exit follows a broader pattern of activist pressure on CoStar's residential business, with hedge fund D.E. Shaw joining the effort and estimating that CoStar will have spent more than $3 billion on Homes.com. However, the combined activist pressure proved insufficient to force a strategic pivot. A CoStar representative did not immediately comment on Third Point's departure, leaving the company's residential strategy intact despite the loss of high-profile activist support.
Loeb's investor letter emphasized that the fund no longer believes its original investment thesis remains viable. "We no longer believe that our original thesis holds true today and have disposed of our position in its entirety," the billionaire investor wrote. Third Point had previously advocated for CoStar to abandon or materially reduce its investment in the residential segment, arguing that the company's diversification strategy was destroying shareholder value rather than creating it. The hedge fund never publicly disclosed the size of its stake, though it had ranked among CoStar's top 15 shareholders at the height of the activist campaign.
The activist campaign centered on criticism of CEO Andy Florance's strategic direction, with Loeb characterizing the ongoing investment in Homes.com as a "reckless drain" on operating income. Despite Third Point's initial success in drawing attention to the issue—the activist push helped lift CoStar shares in January 2026—the stock has since declined more than 50% over the trailing 12-month period, undermining the fund's fundamental thesis. CoStar, headquartered in Washington, D.C., operates major platforms including Apartments.com and Homes.com as part of its expansion from its historical focus on commercial real estate data and analytics.
The exit follows a broader pattern of activist pressure on CoStar's residential business, with hedge fund D.E. Shaw joining the effort and estimating that CoStar will have spent more than $3 billion on Homes.com. However, the combined activist pressure proved insufficient to force a strategic pivot. A CoStar representative did not immediately comment on Third Point's departure, leaving the company's residential strategy intact despite the loss of high-profile activist support.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.