Well - whatever the case - DHG is cost cutting and thus I would assume their outlook has soured. REA has been putting up prices for quite a while - but if there are less transactions, then I do not see wonderful profit or margin increases. Real estate agents will be struggling, and will try to push back on unilateral price increases if they occur. A better strategy for REA is to remain friends by flexing. After all the agents have their own websites, and can at least become a nuisance if they consider aggregating their websites through a combined portal. Also google is in the background allowing searches. Also when you do searches on google you currently get REA and DHG sites under different names, which could be seen as anti-competitive and unethical. Any challenger site would appear on google nearer the top with ACCCs blessing I would suspect.
Shorted REA on the DHG news. Will see what happens.
REA Price at posting:
$76.24 Sentiment: Sell Disclosure: Held
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