‘Big Short’ investor Steve Eisman says this stock has one of the ‘most flawed’ business models he’s seen

Investor Steve Eisman is predicting bad things ahead for anyone betting on online real estate site Zillow, which has been trying to expand its operations but faces a stiff challenge.

The managing director and senior portfolio manager at Neuberger Berman has been shorting Zillow for some time, and explained to CNBC in an interview Thursday that the company’s plans to grow its business are fraught with peril…

“I would say Zillow has one of the most flawed business models I’ve seen in a very, very long time,” he said during a “Power Lunch” appearance.

CNBC has reached out to Zillow for comment. Shares tumbled more than 14% in afternoon trading and but have surged 32% year to date. At 22.1% of shares outstanding, the company is one of the most-shorted on the market.

Eisman is know, among other things, for betting against the subprime mortgage industry whose collapse helped trigger the financial crisis. He shorted financial instruments known as collateralized debt obligations that bundled mortgages together and whose failure crippled Wall Street. The bet was immortalized in the book “The Big Short” and the movie of the same name.

These days, he said he thinks the financial system is “safe” and is finding his opportunities elsewhere.

One of his more high-profile shorts is against Zillow, the mammoth real estate listing site that, in addition to being a housing marketplace, is venturing off into other endeavors like a platform for home-flipping. Eisman thinks the company is…

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