NEW YORK ( TheStreet) -- Investors followed the "smart money" into Zillow ( Z) Tuesday. Tiger Global Management, a firm Forbes called "the world's hottest hedge fund," bought a 9.5% stake in the online real estate search company, according to an April 21 SEC filing that made its rounds on the Web Tuesday. The fund, run by Charles P. Coleman III, has been a top performer for several years.
Zillow's stock rose more than 11% today.
But some investors said smart money was making a big mistake with Zillow. With a market cap of $3.97 billion, the company trades at a whopping 150 times expected 2015 earnings. That valuation is too rich, say many on StockTwits.com, even for a high-growth stock in a large market. Sentiment on Zillow is 51% bearish, according to StockTwits' analytics.
$Z up 4% off Tiger allocation..AH..shorts barbequed..pass the grey poupon.-- carol edwards (@Thorgood) Apr. 28 at 05:00 PM
$Z The one word that describes this thing is volatile. And yes, I have two new short positions in this thing. Let's do this!-- Ruben (@MGO100RMG) Apr. 29 at 03:20 PM
It's not as though Zillow lacks competition. Trulia ( TRLA), Realtor.com, and Redfin are just a few of the online sites vying for home shopper traffic.
$Z over value and Bubble stocks. sell in May and go away crash is very near-- Sam son (@wisdom_trade) Apr. 29 at 03:10 PM
Other investors saw wisdom in Tiger Global's investment. Nearly $4 billion was not too much, he said, for a company tapping the massive real estate advertising market.
-- tickertutor (@tickertutor) Apr. 29 at 02:43 PM
At the time of publication the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.