This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Investors Feeling Pain of Homestore's Stalled Turnaround

Is (HOMS) fit for condemnation -- or a fixer-upper simply in need of a little TLC?

That's what investors want to know after the online real estate company's shares have crumbled in recent days, losing 38% of their value just since last Tuesday -- the day Homestore disappointed investors by missing analysts' earnings targets and pushing back its target date for profitability. The shares were recently up by a few pennies to $2.14 in Tuesday trading.

Although the company still has its fans, even some of them admit that Homestore is still a work in progress. "This is arguably the harriest Internet turnaround out there," said Mark Mahaney, who covers the company for American Technology Research. (American does not do investment banking and Mahaney does not hold shares in Homestore.)

Homestore is the leading national real estate site on the Web. The company operates the official Web site of the National Association of Realtors and lists the vast majority of houses for sale by real estate agents. The company also offers advertisements for newly built homes and for rental apartments.

Investors and analysts once valued shares of Homestore, which reached $138 in January 2000, in the same neighborhood as Yahoo! (YHOO), Amazon (AMZN) and eBay (EBAY).

Like those companies, Homestore's stock sunk in the subsequent market bust, but unlike them, Homestore's stock remained stuck in the mire after an accounting scandal and a subsequent inquiry by the Securities and Exchange Commission. Following its own investigation of the accounting matter, Homestore acknowledged that it had overstated its revenue and earnings in 2000 and 2001 by millions of dollars.

But the pain didn't stop there -- the company saw its revenue plunge in 2002 and again last year.

Reversing Course

Lately, however, the company seemed to be turning things around. Homestore has never posted a full-year profit as a public entity, but it began promising that black ink was just around the corner.

1 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs