Third Point, D.E. Shaw obtain agreements with CoStar.

Core Insights - CoStar Group has entered into support agreements with D.E. Shaw and Third Point for board refreshment and corporate governance enhancements [3][6] - The agreements include the addition of three new directors and the retirement of three long-tenured directors, indicating a significant board refreshment [6][8] - CoStar's core business generates approximately 95% of its revenue, primarily from CoStar Suite and Apartments.com, which have strong competitive advantages [4][5] Company Overview - CoStar Group operates online real estate marketplaces and analytics, managing brands like CoStar Suite, LoopNet, Apartments.com, and Homes.com [4] - The company has historically traded at a premium to its peers but is currently valued in line with them due to aggressive investments in its Homes.com business [4][5] Financial Dynamics - CoStar is diverting about 75% of its $1.3 billion EBITDA to fund$900 million in losses from Homes.com, leading to a significant increase in capital expenditures [5][8] - Capital expenditures are projected to rise by 878% from 2021 to 2024, with a 347% increase expected in 2024 alone [5] Governance Changes - The newly formed capital allocation committee will focus on funding the Homes.com business without relying on core business cash flow and will assess international expansion opportunities [7][8] - The committee's goal is to enhance the valuation of CoStar's core business, potentially increasing its enterprise value from around $30 billion to approximately$45 billion [8] Activist Investor Involvement - Third Point holds a 2.04% position in CoStar, while D.E. Shaw's position remains undisclosed but is expected to be significant given its size as a $70 billion hedge fund [9]