Zillow shares fall after weak guidance

Zillow (Z) shares dropped as much as 12 percent Tuesday morning, after the company held a conference call that included guidance significantly below Wall Street estimates.

The stock had traded up more than 3 percent prior to a premarket halt just before 9 a.m. ET. When Zillow resumed trading about an hour later, the weak guidance took a toll on share prices: The stock opened about 12 percent down, before paring much of that loss.

On the call, Zillow CEO Spencer Rascoff announced that the company is expecting EBITDA in the range of $80 million to $85 million for the full year 2015—Wall Street had expected that figure to be about $146.8 million, according to FactSet.

"The work we are doing this year lays the foundation for an incredibly bright 2016 and 2017. However, 2015 is a transition year and we're trending a couple quarters behind where we'd like to be, due to the protracted [Federal Trade Commission] approval process which only ended two months ago," Rascoff said, referring to the recent deal to merge with Trulia.

Read More Realtors shouldn't worry about Zillow-Trulia deal: Pros

Rascoff also said the company expects pro forma revenue at about $690 million for the year. Analysts had expected the company to post revenues of about $752.97 million in 2015, according to Thompson Reuters.

In a message to CNBC, Rascoff described 2015 as "a little messy," but admitted that the Trulia business is "softer than we'd like" in part because of the FTC process.

On the call, Rascoff also explained the below-estimate guidance as a consequence of "some decisions to establish our foundation for growth that will impact our results in the near term." He cited a decrease in advertising placements for the Trulia platform, among other moves.

The CEO also revealed that, since the merger with Trulia, the company has "successfully rightsized our company and reduced our expense base" by firing more than 350 employees.

Rascoff said in his prepared conference call comments that he would give his company "a very good report card for the first eight weeks" after closing the deal. And in his message to CNBC, he said the company is set for $100 million in synergies in 2016.

Read More Zillow deal has 'significant synergy potential'

As for Tuesday morning's stock moves, Rascoff said he was not overly concerned with daily action. "Volatile stock, obviously. As you know, I focus on the long-term not on short-term fluctuations," he wrote to CNBC.

Zillow had a market cap of about $5.36 billion before Tuesday trading, according to FactSet.

Rascoff sold about $487,200 worth of Zillow shares last week, in accordance with a 10b5-1 plan established last year, according to an Securities and Exchange Commission filing. Such a plan allows executives to create a timetable for predetermined stock sales, so they cannot be accused of insider trading.

What's Zillow's (Z) stocks doing now? (Get the latest quote here.) (Z)