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International Business Times UK
International Business Times UK
Niloy Chakrabarti

Here's Why This Activist Hedge Fund Bought $555M Shares of Rocket Companies A Day After FTC Lawsuit

Rocket Rocket Companies FTC Redfin Lawsuit ValueAct Capital ValueAct Zillow
Rocket Companies acquired Redfin early this year. (Credit: Photo by The Lazy Artist Gallery/Photo credit: Pexels)

Activist hedge fund ValueAct Capital, led by Jeff Ubben, purchased 26.3 million shares of Rocket Companies (NYSE:RKT) on Oct. 1, a day after day the Federal Trade Commission (FTC) filed an antitrust lawsuit against its unit, Redfin, and Zillow (Nasdaq:ZG), alleging that the real estate platforms entered into an unlawful agreement to suppress competition in the online rental housing advertising market.

The FTC lawsuit highlighted a $100 million (£74 million) agreement between Redfin and Zillow, executed in February, under which Redfin would terminate its contracts with advertising customers to stop competing in the advertising market for multifamily properties. The agreement also required Redfin to syndicate only Zillow rental listings, giving the latter exclusive control over multifamily rental listings on Redfin's platforms. Redfin also downsized its workforce after the deal, and some of those employees were subsequently hired by Zillow.

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