Zillow Investors Get Green Light on Bulk of Stock Drop Claims

Zillow Group Inc. failed to shake off consolidated class action claims that it made misleading statements to investors related to its home-flipping business.

The proposed class sufficiently alleges that Zillow made statements that would have been misleading to a reasonable investor, Judge Thomas S. Zilly of the US District Court for the Western District of Washington said Wednesday.

The plaintiffs allege Zillow falsely touted the accuracy of algorithms used to price homes, which it would then flip, when they say it was actually overpaying for thousands of homes through its Zillow Offers program.

The plaintiffs also plausibly allege that Zillow’s ...