Smart Money Bets On Zillow. Investors Question The Wisdom.

Investors followed the “smart money” into Zillow, $Z, Tuesday.

Tiger Global Management, a firm nicknamed by Forbes as “the world’s hottest hedge fund,” bought a 9.5% stake in the online real estate search company, according to an April 21 SEC filing that made its rounds on the Web today. The fund, run by Charles P. Coleman III, has been a top performer for several years.

The stock rose more than 11% today.

$Z up 4% off Tiger allocation..AH..shorts barbequed..pass the grey poupon.

— carol edwards (@Thorgood) Apr. 28 at 05:00 PM

But some investors said smart money was making a big mistake with Zillow. With a market cap of $3.97 billion, the company trades at a whopping 150X expected 2015 earnings. That valuation is too rich, say many on, even for a high growth stock in a large market. Sentiment on Zillow is 51% bearish, according to StockTwits’ analytics.

$Z The one word that describes this thing is volatile. And yes, I have two new short positions in this thing. Let's do this!

— Ruben (@MGO100RMG) Apr. 29 at 03:20 PM

$Z over value and Bubble stocks. sell in May and go away crash is very near

— Sam son (@wisdom_trade) Apr. 29 at 03:10 PM

It’s not as though Zillow lacks competition. Trulia, $TRLA,, and Redfin are just a few of the online sites vying for home shopper traffic.

Other investors saw wisdom in Tiger Global’s investment. Nearly $4 billion was not too much for a company tapping the massive real estate advertising market.

$Z I'm not focused on valuation here because the market they're going after is so freakin huge. We're talking $125Bln marketing spend…

— tickertutor (@tickertutor) Apr. 29 at 02:43 PM

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