Shares of real estate technology company eXp World (NASDAQ:EXPI) fell 3.5% in the afternoon session after news of a major merger between two of its key competitors, Compass and Anywhere Real Estate, created significant competitive pressure.

The two firms announced a definitive agreement to combine in an all-stock transaction, forming a powerhouse residential real estate platform with approximately 340,000 agents globally. This development likely sparked concern among investors about eXp's market position in an increasingly consolidated industry.

The shares closed the day at $10.71, down 3% from previous close.

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eXp World’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 11 days ago when the stock gained 2.8% on the news that the latest Consumer Price Index (CPI) report came in largely as expected, reinforcing investor hopes for an upcoming Federal Reserve interest rate cut.

Data from the Bureau of Labor Statistics showed headline inflation for August at a 2.9% annual rate, with core inflation, which excludes volatile food and energy prices, holding steady at 3.1%. While inflation remains above the Federal Reserve's target, Wall Street interpreted the figures as not being high enough to prevent a widely anticipated rate reduction at the central bank's meeting next week. Analysts note that the Fed's focus has shifted toward the risks of a cooling labor market. With this report being the last key data point before the meeting, the market's conviction for a rate cut strengthened, fueling a broad rally that pushed major U.S. stock indexes to record highs.

eXp World is down 5.6% since the beginning of the year, and at $10.70 per share, it is trading 27.6% below its 52-week high of $14.77 from November 2024. Investors who bought $1,000 worth of eXp World’s shares 5 years ago would now be looking at an investment worth $530.75.

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