Key Takeaways
- • Third Point abandons proxy fight at CoStar Group and exits entire stake after stock collapsed 45% from $66 in January to $36.48 by April 10, 2026, destroying roughly $12.7 billion in market value (from $28 billion to $15.3 billion).
- • Dan Loeb's hedge fund reversed activist position citing failed investment thesis, stating "we no longer believe that our original thesis holds true today and have disposed of our position in its entirety" in letter to investors.
- • Third Point had ranked among CoStar's top 15 shareholders and previously pushed for board overhaul and divestment of Homes.com residential platform, criticizing CEO Andy Florance's capital allocation strategy as a "reckless drain" on operating income.
- • CoStar Group rejected activist demands to divest Homes.com, citing network benefits and completed investment phase, forcing Third Point to exit rather than escalate proxy battle before director nomination deadline.
Summary
Billionaire investor Daniel Loeb's Third Point hedge fund has abandoned its activist campaign at CoStar Group and liquidated its entire shareholding position, according to sources and a letter to investors disclosed on April 10–11, 2026. The decision marks a significant reversal for one of Wall Street's most prominent activist investors, who had signaled in January 2026 that he would pursue a proxy fight to reshape the company's board and strategy.
Third Point's exit comes against the backdrop of a severe equity collapse. CoStar shares plummeted from approximately $66 per share in January to $36.48 at market close on April 10—a 45% decline that erased roughly $12.7 billion in market capitalization over three months, reducing the company's valuation from $28 billion to $15.3 billion. The hedge fund, which had held a position ranking among CoStar's top 15 shareholders, concluded that its original investment thesis could not be salvaged. In his letter to investors, Loeb stated plainly: "We no longer believe that our original thesis holds true today and have disposed of our position in its entirety."
Third Point's campaign had centered on forcing CoStar to refocus on its core commercial real estate data and analytics business while scaling back or divesting its residential segment, particularly Homes.com. Loeb criticized CEO Andy Florance's continued investment in and acquisitions related to Homes.com, describing the strategy as a reckless misallocation of capital that drained operating income while the stock declined. The hedge fund had signaled its intention to nominate director candidates, with a deadline set for Sunday following the April 10 announcement, but opted not to proceed.
CoStar Group, headquartered in Washington, D.C., and operating properties including Apartments.com and Homes.com, had rebuffed activist demands and maintained its commitment to the residential platform expansion. The company argued that the Homes.com investment phase had completed and offered strategic network benefits, deflecting pressure from both Third Point and co-activist investor D.E. Shaw to divest the asset. With Third Point determining that a proxy fight would not force the strategic changes necessary to reverse the company's deteriorating financial trajectory, the hedge fund chose to exit rather than wage a costly shareholder battle it believed would ultimately fail.
Third Point's exit comes against the backdrop of a severe equity collapse. CoStar shares plummeted from approximately $66 per share in January to $36.48 at market close on April 10—a 45% decline that erased roughly $12.7 billion in market capitalization over three months, reducing the company's valuation from $28 billion to $15.3 billion. The hedge fund, which had held a position ranking among CoStar's top 15 shareholders, concluded that its original investment thesis could not be salvaged. In his letter to investors, Loeb stated plainly: "We no longer believe that our original thesis holds true today and have disposed of our position in its entirety."
Third Point's campaign had centered on forcing CoStar to refocus on its core commercial real estate data and analytics business while scaling back or divesting its residential segment, particularly Homes.com. Loeb criticized CEO Andy Florance's continued investment in and acquisitions related to Homes.com, describing the strategy as a reckless misallocation of capital that drained operating income while the stock declined. The hedge fund had signaled its intention to nominate director candidates, with a deadline set for Sunday following the April 10 announcement, but opted not to proceed.
CoStar Group, headquartered in Washington, D.C., and operating properties including Apartments.com and Homes.com, had rebuffed activist demands and maintained its commitment to the residential platform expansion. The company argued that the Homes.com investment phase had completed and offered strategic network benefits, deflecting pressure from both Third Point and co-activist investor D.E. Shaw to divest the asset. With Third Point determining that a proxy fight would not force the strategic changes necessary to reverse the company's deteriorating financial trajectory, the hedge fund chose to exit rather than wage a costly shareholder battle it believed would ultimately fail.
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