The D. E. Shaw Group Releases Open Letter to the Board of Directors of CoStar Group

Criticizes the Company's Latest Attempt to Evade Accountability for Longstanding and Ongoing Underperformance of Homes.com

NEW YORK, March 10, 2026 /PRNewswire/ -- The D. E. Shaw group, a global investment and technology development firm with more than $85 billion in investment capital and a history of working with companies to help build long-term value, today sent an open letter to the Board of Directors of CoStar Group, Inc. (NASDAQ: CSGP) ("CoStar" or the "Company") expressing disappointment in the Company's decision to reconfigure its reporting segments and, as a result, reduce transparency into the financial results of CoStar's underlying businesses. Today's letter follows D. E. Shaw's previous letter and presentation sent to CoStar's Board of Directors on February 4, 2026, which can be found here.

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The full text of the open letter to the Board follows:

Board of Directors
CoStar Group, Inc.
1201 Wilson Boulevard
Arlington, VA 22209

Re:     Reduced Transparency and Accountability Enabling Continued Value Destruction

Dear Members of the Board:

Last month, CoStar (the "Company") announced a sudden change in reporting structure that provides investors with less visibility into its underlying operating business and, in our view, represents a troubling step backward for transparency and accountability. The segment reorganization appears designed to obscure the results of CoStar's persistently underperforming Homes.com business—just six weeks after management made new performance commitments to shareholders for that same business.

This new reporting approach effectively buries the poor financial results of Homes.com within a new, amalgamated "Residential" segment that incorporates the larger and more profitable Apartments.com business—which we believe is performing well and has strong potential to deliver accelerating growth—and three other businesses. Furthermore, the Company also unexpectedly stopped disclosing net new bookings for Homes.com, a key operating metric used by investors to track the progress of the business. During the most recent earnings call, when analysts specifically requested segment-level net new bookings data, management declined to provide the information. Investors took notice: these puzzling moves contributed to a 9% decline in the Company's stock price the following day—destroying nearly $2 billion of shareholder value.

In our view, CoStar's "hide the ball" exercise all but ensures that the Board and management cannot be held accountable for Homes.com's future performance by the owners of the Company and further demonstrates the Board's disregard for shareholder interests. Pulling back on substantially all of Homes.com disclosures (revenue, EBITDA, bookings) is especially concerning given the management team's troubling inability to accurately project the growth and profitability of Homes.com.

While the Board has claimed it is "focused on holding management accountable", there can be no accountability without transparency. We are therefore gravely disappointed that the Board—and especially the members of the Audit Committee, which is charged with overseeing the Company's financial reporting—would approve an accounting change that has the effect, if not the intent, of obfuscating the performance of a troubled business that is currently the subject of significant investor concern and fresh management commitments.

For some time, investors have been deeply concerned about the substantial capital allocated to Homes.com and the resulting prolonged underperformance of CoStar's stock (see Exhibit 1). Now, however, concerns have expanded beyond performance alone. The Company's abrupt move to reduce segment transparency has raised a more fundamental question: whether shareholders can trust management's reporting and stewardship. When disclosure is curtailed at a moment when accountability is most needed, investors cannot help but ask: What is CoStar trying to hide?

For the better part of a year, we have repeatedly expressed to the Board our belief that Homes.com is eroding shareholder value. At each juncture, the Board has largely dismissed these concerns and reaffirmed its commitment to the venture. We view the recent segment reorganization as the Board's latest attempt to shield Homes.com from scrutiny rather than subject it to rigorous oversight. The consequences of that intransigence are undeniable: CoStar's stock is now hovering near seven-year lows. This extraordinary record of value destruction, coupled with the deliberate reduction in transparency, underscores the urgent need for improved oversight and accountability to maximize shareholder value. A Board truly confident in its commitment to Homes.com would insist on transparency and clear accountability rather than permitting reporting changes that diminish investor visibility.

Best Regards,

This letter reflects the opinions of D. E. Shaw & Co., L.P. ("DESCO LP") on behalf of certain investment funds managed or advised by it that currently beneficially own, or otherwise have an economic interest in, shares of CoStar Group, Inc. (the "Company" or "CoStar"). This letter is for informational purposes only and does not constitute investment advice or convey an offer or solicitation of any type with respect to any securities or other financial products. The views expressed in this letter are expressed as of the date hereof and are based on publicly available information and DESCO LP's analyses. This letter contains statements reflecting DESCO LP's opinions and beliefs with respect to the Company and its business based on DESCO LP's research, analysis, and experience; all such statements are based on DESCO LP's opinion and belief, whether or not those statements are expressly so qualified. DESCO LP acknowledges that the Company may possess information that could lead the Company to disagree with DESCO LP's views and/or analyses. Nothing contained in this letter may be relied upon as a guarantee, promise, assurance, or representation as to future events. The investment funds managed or advised by DESCO LP are in the business of trading (i.e., buying and selling) securities, and it is expected that they will from time to time engage in transactions that result in changes to their beneficial and/or economic interest in the Company.

About the D. E. Shaw Group

The D. E. Shaw group is a global investment and technology development firm with more than $85 billion in investment capital as of December 1, 2025, and offices in North America, Europe, and Asia. Since our founding in 1988, our firm has earned a reputation for successful investing based on innovation, careful risk management, and the quality and depth of our staff. We have a significant presence in the world's capital markets, investing in a wide range of companies and financial instruments in both developed and developing economies. For more information, visit www.deshaw.com.

This press release reflects the opinions of D. E. Shaw & Co., L.P. ("DESCO LP") on behalf of certain investment funds managed or advised by it that currently beneficially own, or otherwise have an economic interest in, shares of CoStar Group, Inc. ("CoStar" or the "Company"). This press release is for informational purposes only and does not constitute investment advice or convey an offer or solicitation of any type with respect to any securities or other financial products. The views expressed in this press release are expressed as of the date hereof and are based on publicly available information and DESCO LP's analyses. This press release contains statements reflecting DESCO LP's opinions and beliefs with respect to the Company and its business based on DESCO LP's research, analysis, and experience; all such statements are based on DESCO LP's opinion and belief, whether or not those statements are expressly so qualified. DESCO LP acknowledges that the Company may possess information that could lead the Company to disagree with DESCO LP's views and/or analyses. Nothing contained in this press release may be relied upon as a guarantee, promise, assurance, or representation as to future events. The investment funds managed or advised by DESCO LP are in the business of trading (i.e., buying and selling) securities, and it is expected that they will from time to time engage in transactions that result in changes to their beneficial and/or economic interest in the Company.

Media Contact:
Prosek Partners
Brian Schaffer / Kiki Tarkhan
[email protected]

SOURCE The D.E. Shaw Group