Third Point launches proxy battle against CoStar Group board

Third Point LLC, managing approximately $24 billion in assets, announced it will nominate a slate of directors to CoStar Group's (NASDAQ: CSGP) board after its standstill agreement with the company expired.

In a letter to CoStar's board dated January 27, 2026, Third Point criticized the company's residential real estate strategy, which it claims has consumed roughly $5 billion over five years while generating minimal returns. The investment firm estimates CoStar's U.S. residential marketplace businesses produced only $60 million in revenue in 2024, with $80 million expected in 2025.

Third Point highlighted CoStar's stock performance, noting a 27% decline over the past five years compared to the S&P 500's 94% total return during the same period. The firm attributed this underperformance to investments in Homes.com and related residential real estate ventures.

The letter criticized CEO Andy Florance's compensation, stating he received approximately $37 million in total compensation in 2024 despite the company's poor stock performance. Third Point noted this placed Florance in the top decile of S&P 500 CEO compensation while CoStar's stock performance ranked in the bottom 10% of S&P 500 companies over five years.

Third Point previously entered a standstill agreement with CoStar and D.E. Shaw that included the appointment of two independent directors and formation of a Capital Allocation Committee. The firm stated it expected improvements in governance and capital allocation but concluded "so little progress has been made that we are convinced the Company never intended to do any of the things we discussed."

The investment firm outlined three immediate actions for CoStar: replacing the majority of the board with more qualified directors, eliminating losses from residential real estate businesses, and refocusing on the core commercial real estate business. Third Point believes the commercial real estate division can achieve revenue growth in the teens and earnings power per share growth above 20%.

You May Also Be Interested In

• American Outdoor Brands (AOUT) Tops Q4 EPS by 14c
• James Hardie redeems $400 million in senior unsecured notes
• Primis Financial (FRST) files $150M mixed shelf