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Compass once the predator now the prey

Rumors’ abound about Compass Real Estate demise. Let’s start from the beginning. Compass real estate came out the gate like a lion with close to $1B in assets today Compass stock is fading at $2.46 a share down 81.53% since the start of 2022.

Companies like Zillow, CoStar and Rocket Mortgage are certainly predators — flush with cash and opportunistically acquisitive in their outlook. Private equity firms with plenty of cash to deploy are the other opportunistic predators.

Compass Real Estate Sitting vulnerable as the prey

The prey is vulnerable businesses — diminishing cash balances with high cash burn. In other words, a typical real estate tech disruptor like Compass. Check this out:

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Boston condos

Real estate and the bottom line

Cash is king. In today’s market, a company’s cash flow determines if it is in control of its own destiny.

  • If a company like Compass is burning cash and needs to raise additional funds, it will be forced to do so on someone else’s terms.
  • But, if a company is cash flow positive with a solid balance sheet this is an environment that presents an incredible opportunity for the right player.

Read more about Compass downfall

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