Redfin (NASDAQ: RDFN) shareholders have lost almost everything in the past 18 months. Going back to February 2021, its shares are down over 96% at recent prices.
So what gives? In short, the housing-technology company has seen its business grow quickly, but a brutally fast downturn in the housing market (where it generates almost all of its revenues) caught it in a bad position, with skyrocketing expenses, and investors are bailing. But despite the risks, there's a lot to like about Redfin for investors willing to stomach a lot of volatility and some very real risks. It's probably stronger than you think, and the upside on the other side of the real estate downturn is tremendous.
Down almost 97% at this writing, Redfin investors who bought near the peak are essentially a rounding error away from a total loss at this point. And while I've already summed up the high-level reasons why, there's a little more to the story, and that "little more" is important to better understand how Redfin makes money.
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Down 96%, This Stock Could Be Worth Buying if You Can Handle the Risk