ZILLOW GROUP, INC. current report, 28 June 2018

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Business Context and Reporting Period

Zillow Group, Inc. filed a Form 8-K Current Report on June 28, 2018, to disclose two simultaneous capital raising events: an underwritten public offering of Class C capital stock and an underwritten public offering of 1.50% Convertible Senior Notes due 2023.

Key Financial Metrics and Capital Structure

  • Equity Offering: Issuance of 5,701,754 shares of Class C capital stock at $55.005 per share.
  • Debt Offering: Issuance of $325.0 million aggregate principal amount of 1.50% Convertible Senior Notes due 2023.
  • Estimated Net Proceeds (Equity): Approximately $313.3 million, or $360.3 million if the 30-day option for 855,263 additional shares is fully exercised.
  • Estimated Net Proceeds (Debt): Approximately $316.5 million, or $364.0 million if the 30-day option for an additional $48.75 million in notes is fully exercised.
  • Use of Proceeds: Approximately $25.6 million of the net proceeds from the Notes Offering will be used to fund privately negotiated capped call transactions.

Material Changes and Unusual Items

This filing represents a significant capital event rather than a periodic financial performance report. The filing does not provide revenue, profit, cash flow, or margin data for the period. The primary material change is the expansion of the company's capital base through the simultaneous issuance of equity and convertible debt.

Outlook, Risks, and Management Commentary

  • Closing Date: Both offerings are expected to close on or about July 3, 2018, subject to customary closing conditions.
  • Underwriters: Goldman Sachs & Co. LLC and Citigroup Global Markets Inc. serve as representatives for both the equity and notes offerings.
  • Contingencies: The final proceeds depend on the exercise of over-allotment options by the underwriters within 30 calendar days of June 28, 2018.

Investor Verification Checklist

  • Verify the final closing date of the offerings (expected July 3, 2018).
  • Confirm whether the underwriters exercised their options to purchase additional shares and notes.
  • Review the final net proceeds received after deducting all underwriting discounts and offering expenses.
  • Examine the terms of the capped call transactions entered into in connection with the Notes Offering.
  • Check subsequent filings for the impact of this capital raise on the company's liquidity and debt-to-equity ratios.