In theory, expanding into adjacent segment is the way to grow outside the core. However, no company is bigger than the market. The world economy has been in a loosening environment for over ten years since 2008. It's not hard to predict the pendulum will swing the other way. It's a very questionable decision for the management to acquire a declining mortgage business with a huge premium when the market was peaked. The price and timing were totally wrong!
Don't get me wrong. I still think REA's property advertising is a good and profitable business. Just like Meta still owns a strong advertising business, Mark Zuckerberg's ambition to tap into Metaverse is dragging the whole company. I hope REA's acquisitions in the past few years are not going to become its "Metaverse".
REA Price at posting:
$122.04 Sentiment: None Disclosure: Not Held
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