This Highflier Could Soon Come Crashing Back to Earth

This weekend marks the two-year anniversary of the IPO for real estate listing firm Zillow (NASDAQ: Z), which came public on July 19, 2011, at a price of $20 a share. The IPO finished its first trading day near $36 a share, and after some intermittent stumbles, has soared to a recent high above $68. That's a 240% gain in just two years for those lucky enough to buy into this IPO.
Yet, if you own the stock now, it may be time to head for the exits. That's because the current valuation is starting to bear almost no relation to the intrinsic value of this business.

In hindsight, investing in Zillow's IPO should be seen as a no-brainer. The company wisely took advantage of homeowners' desire to have much more information when deciding to buy or rent a home. Real estate brokers were always stingy with such information, a strategy they now should regret as companies like Zillow "democratize" the flow of information.  (more)
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