Property broker Douglas Elliman set to start trading in spinoff
BNN Bloomberg
Luxury real estate brokerage Douglas Elliman Inc. began trading as a public company Thursday, at a time when home sales are hot but competitors’ shares have struggled.
Luxury real estate brokerage Douglas Elliman Inc. began trading as a public company Thursday, at a time when home sales are hot but competitors’ shares have struggled.
The stock is a spinoff from Vector Group Ltd., which will continue as a tobacco company. Current investors received one share of the real estate unit for every two shares of Vector they own. The goal is to offer a choice, which could lead to volatility in the two separately traded stocks, Vector Chief Executive Officer Howard Lorber said in an interview before the opening.
The new company, trading as DOUG on the New York Stock Exchange, was up 5.1 per cent from its US$10 opening at 11:07 a.m. New York time. Vector fell 12 per cent.
“Certain people owned Vector for the tobacco and didn’t really care about Douglas Elliman,” said Lorber, who will serve as executive chairman of the spinoff. “On the other hand, there are people who would’ve invested in Douglas Elliman but by charter can’t invest in tobacco.”
The spinoff comes to market as U.S. home prices climb to all-time highs amid low mortgage rates and surging demand, with scarce inventory fueling bidding wars. But the hot market hasn’t helped shares of all companies involved in the business of selling homes.
Zillow Group Inc., Redfin Corp. and Compass Inc. are ending this year with declines of more than 40 per cent, although Realogy Holdings Corp. -- owner of brands including Century 21 and Sotheby’s International Realty -- has edged out most stock indexes.
