Investors Feeling Pain of Homestore's Stalled Turnaround

Is Homestore.com (HOMS Quote) 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. ...