Opendoor

Shares of Opendoor Technologies (OPEN -5.67%) were trading lower for the second day in a row today after hedge fund manager Eric Jackson seemed to prompt a rotation to Better Home & Finance after naming it as his next 100-bagger pick yesterday on X.

Opendoor, which had gained more than 2,000% over the last three months on a meme stock rally, continued to give up those gains and was down 10.9% as of 10:22 a.m. ET. Better Home & Finance, on the other hand, was up 27.5% at the same time.

Image source: Getty Images.

Is the Opendoor rally fading?

Jackson has been the unofficial leader of the Opendoor meme stock surge, originally setting it off with the argument that Opendoor could be the next Carvana, as the online used-car dealer has jumped more than 100 times since avoiding bankruptcy nearly three years ago.

Opendoor’s surge over the last three months shows that that argument has resonated, and the rally even helped usher in a leadership change. However, the fundamentals of Opendoor’s business haven’t changed, and at some point, that will matter.

While falling mortgage rates should favor the company, that won’t make it profitable by itself.

What’s next for Opendoor?

Since stepping into the CEO chair last week, Kaz Nejatian has been tirelessly promoting the company on social media and touting changes it’s made.

Opendoor expanded its product to all 50 states, up from just 50 markets previously, and Nejatian said on X last night that the company has an exciting product coming out in the next week.

Changes are afoot at Opendoor, but it will take time for them to have an impact on the business. There are still good reasons to doubt the online home flipper’s business model, but investors clearly want to see disruption from Nejatian.

Shares of Opendoor Technologies (OPEN 13.23%) are soaring on Wednesday, up 6.5% as of 2:58 p.m. ET. The jump comes as the S&P 500 (^GSPC -0.11%) lost 0.6% and the Nasdaq Composite (^IXIC -0.17%) lost 0.9%.

A regulatory filing from the company, as well as the Federal Reserve’s rate cut confirmation, is sending Opendoor stock flying.

Opendoor is expanding its reach

The company filed an 8-K disclosure with the SEC, revealing that it “intends to expand its product offerings to allow [Opendoor] to provide services through the entire continental United States in the coming weeks, through one or more of its direct cash offer, cash plus, or working with its partner agents to provide listing services.”

The revelation that the company is officially expanding to the entire U.S. market is fueling investor enthusiasm.

Image source: Getty Images

Powell confirms rate cut is here

Federal Reserve chairman Jerome Powell confirmed today that the central bank will cut the federal funds rate by 0.25%. Rate cuts generally boost equities across the board, but as a real estate company, Opendoor’s bottom line is directly impacted by interest rates. Lowered rates will help improve the company’s margins.

Opendoor still has to prove its business model can work

While the digital real estate disruptor operates in a market with genuine potential for innovation, the economics of its model remain unproven. The company is operating at a loss and relies heavily on debt, making it sensitive to interest rates, and the real estate market doesn’t look particularly strong. I would avoid Opendoor stock.

One of the hottest stocks this year has been Opendoor (OPEN 4.30%), which is up more than 500% year to date as of this writing. The stock recently shot up nearly 80% in one day after the company announced both a new CEO and that its co-founders were returning to take seats on its board of directors.

However, the stock’s meteoric rise this year is not because of the strength of its business or signs of a turnaround. In fact, the stock saw its share price actually cut in half earlier this year before hedge fund manager Eric Jackson of EMJ Capital started hyping the stock on social media platform X (formerly Twitter) in July, saying it had the potential to be a 100-bagger. Others then piled in, with influential newsletter writer and podcaster Anthony Pompliano also promoting the stock. Essentially, it’s become a meme stock.

With a high short interest and retail investors jumping in, the stock skyrocketed despite poor results.

A struggling business

Opendoor is essentially a company that flips houses. It uses a proprietary algorithm to act as an instant buyer of homes, making all-cash offers to sellers. While the company typically offers somewhat lower amounts than what a home is worth, the allure for sellers is that it’s a quick sale, and they can avoid the hassle of things like house showings and open houses.

The company makes money in two primary ways. The first revenue stream is through flipping the house, where it makes repairs and then sells it at a higher price. It charges a service fee, which it says is akin to a realtor’s commission. It’s also been working to expand its business into a more comprehensive platform, offering services such as mortgage services and title insurance.

The biggest issue with Opendoor’s business model is that the company takes on significant inventory risk. Once it buys a home, it owns the home. These things aren’t cheap. This process exposes Opendoor to losses if a house sits too long, since it has to pay real estate taxes and other costs like utilities. Meanwhile, home prices can also fall. The model can work in a rising price environment, but in a tough real estate environment, it can be challenging.

Profits have been tough to come by for the company, although last quarter it was able to squeeze out its first quarter of EBITDA profitability in three years. Its revenue climbed 4% to $1.6 billion, as it sold 4,299 homes, up 5%.

This is a low-gross-margin business, and gross margins slipped by 30 basis points to 8.2%. It recorded a net loss of $29 million in the quarter, but positive adjusted EBITDA of $23 million.

However, the company offered up a cautious outlook going forward due to what it called a deteriorating housing market. It said consistently high mortgage rates are leading to less buyer demand, resulting in both fewer acquisitions and lower resale volumes. The company only purchased 1,757 homes in the second quarter, which was down 63% versus a year ago.

As a result, it guided for third-quarter revenue of between $800 million to $875 million, and an adjusted EBITDA loss of between $28 million and $21 million. That compares to revenue of $1.4 billion in Q3 last year and an adjusted EBITDA loss of $28 million.

The company has started to lean more into working with real estate agents for business. It’s also introduced a cash plus hybrid product where a seller gets cash upfront, but can receive additional proceeds after the sale.

Image source: Getty Images.

Why the stock is unlikely to be a long-term winner

While Opendoor has had a great run, it’s unlikely to be a long-term winner. It has a capital-intensive business model with slim gross margins. The ability to really scale this business over the long run is difficult, and the company carries significant inventory risk.

After its latest surge, its market cap jumped to $7.7 billion. The company only generated $433 million in gross profits last year and $227 million through the first six months of this year, while projecting a slowdown in the second half.

The company would be smart to use its elevated stock price to issue stock and start stockpiling cash. However, even with that, it is hard to justify its current valuation for a business model that, as currently constructed, just isn’t that attractive.

Shares of Opendoor Technologies (OPEN 5.24%) were moving higher today, even as there was no news out on the volatile online home flipper.

Instead, investors seemed to be looking forward to Wednesday’s rate decision from the Federal Reserve, which will include commentary and a forecast on future rate cuts. Investors widely expect the central bank to cut the federal funds rate by 25 basis points on Wednesday. CEO Kaz Nejatian also began his first day on the job.

As of 10:33 a.m. ET, Opendoor stock was up 11.5%.

Image source: Getty Images.

What the Fed rate decision means for Opendoor

Since its business is so closely tied to the housing market, few stocks seem to have more to gain from falling rates than Opendoor does, as housing is likely to bounce back as rates come down.

In addition to the expected rate cut of 25 basis points, we’ll also get some insight into the direction of future rate cuts, as the Fed will also release its quarterly “dot plot” projections, in addition to Fed chair Jerome Powell’s commentary at the press conference.

Back in June, the Fed had forecast 50 basis points of cuts this year, but that forecast could change as the labor market has softened substantially in the last couple of months.

New Opendoor CEO Kaz Nejatian is also starting in the job today, and co-founder Keith Rabois is back as  chairman, which is likely to accelerate changes in the business.

What’s next for Opendoor?

Opendoor’s volatility will almost certainly continue through the coming weeks and months, as it’s turned into a meme stock, but one with a legitimate chance at a turnaround now with new leadership in place and interest rates expected to fall.

Expect the stock to swing on Wednesday as well. While the rate cut is likely priced in at this point, the stock will move based on commentary and the forecast from the Fed.

Yesterday was a big day for Opendoor Technologies (OPEN -10.88%) stock. Shares of the online real estate platform skyrocketed 80% yesterday after it named a new CEO. Retail investors have been rallying behind Opendoor, turning it into the latest meme stock.

Today, though, investors are booking those gains. Co-founder and new chairman Keith Rabois squashed some of the excitement surrounding the stock in a CNBC interview this morning. Shares had plunged by 15.4% at 1:17 p.m. ET.

Image source: Getty Images.

Is Opendoor bloated and broken?

Rabois and co-founder Eric Wu were brought back to the board of directors yesterday after Kaz Nejatian, formerly chief operating officer of Shopify, was appointed CEO. Today, Rabois said of the company’s 1,400-member workforce, “I don’t know what most of them do.” He stressed that a headcount reduction would be coming as more than 200 current employees aren’t needed, in his opinion.

Rabois called the workforce “bloated” from the ability to work remotely. He added this:

The culture was broken. These people were working remotely. That doesn’t work. This company was founded on the principle of innovation and working together in person. We’re going to return to our roots.

Rabois also contended that Opendoor was not, as many investors claim, a meme stock. Shares have rocketed more than 1,300% in the last three months behind retail trader support.

Rather, he said the retail movement in stocks is healthy as consumers, not professional money managers, are deciding what stocks to support.

That’s bound to be a controversial point of view. Investors who own Opendoor for the momentum of a meme stock might be dumping shares today. That’s probably a smart move, too. Eventually, business fundamentals will win out. A turnaround in the housing sector might be what saves Opendoor’s currently unprofitable business, but that remains to be seen.

Sept. 11 (UPI) — Shopify’s COO is taking over the top role at Opendoor Technologies, while the company’s co-founders are back in the fold.

The online residential real estate company announced Wednesday that Shopify’s Chief Operating Officer Kaz Nejatian has been appointed its CEO and a board member.

“It’s a privilege to become Opendoor’s leader,” said Nejatian in a press release. “Few life events are as important as buying or selling a home.”

“Opendoor returns to FounderMode,” Opendoor co-founder Keith Rabois posted to X Wednesday. “And we just hired the absolute best executive who has a founder brain as CEO: [Kaz Nejatian].”

As for Rabois, he’s now back with the company as the Opendoor board chairperson, while company co-founder Eric Wu is back as a member of the board.

Rabois and Wu co-founded Opendoor in 2013.

“Opendoor’s mission is more relevant than ever,” Wu said in the release. “Homeowners deserve a better system, and with Kaz’s vision, mentality and creativity, I’m confident he can lead Opendoor’s next chapter and build a category-defining company.”

The move has generated a massive stock swing in the right direction, as Opendoor stock soared 60% Thursday following the announcement.

“Welcome back home,” Opendoor posted to its social media Wednesday. “Keith Rabois and Eric Wu are back on the Opendoor board.”

“Their founding leadership is written in the DNA of the company, and we look forward to the future ahead,” it concluded.

Opendoor Technologies (OPEN -6.69%) stock popped by as much as 10% Monday morning. The stock remains highly volatile, and its next move showed investors why it’s a risky bet. Shares lost all of those gains and more in heavy midday trading.

As of 1:22 p.m. ET, Opendoor stock was lower by 3.8% on the day.

Image source: Getty Images.

Meme stocks aren’t for investors

Traders who frequent the forums on social media platforms like Reddit have turned Opendoor into a meme stock. That has led to retail traders and some investors following it closely. Shares popped early Monday after reports were published highlighting a 30,000-share purchase by Opendoor’s interim CEO.

Those reports triggered some heavy trading in the name; it surpassed its 65-day average trading volume only halfway through the session. The problem is that Shrisha Radhakrishna’s 30,000-share purchase occurred on Aug. 28 — after he was named as temporary CEO when Carrie Wheeler stepped down from the top job.

Another catalyst driving Monday’s early move higher was a push on social media over the weekend to bring back co-founder Keith Rabois. There has been no indication from Rabois that he would be returning to Opendoor.

Another factor that may be contributing to jumps by Opendoor is the stock’s high short interest. As of mid-August, more than 24% of Opendoor’s stock was held by short-sellers. That means any move higher may get enhanced by a short squeeze.

All of those things are really just short-term noise for long-term investors, though. Opendoor’s business has been struggling amid a sluggish housing market. With the Federal Reserve expected to begin lowering its benchmark interest rates soon, the housing market could get some relief. However, with retail traders driving the action for Opendoor stock, investing in it remains a risky proposition.

After breaking out in July, Opendoor Technologies (OPEN 0.98%) soared again in August, climbing on the thesis that the business would turn around on new signs that the Fed would cut interest rates. Investors also reacted positively to news that CEO Carrie Wheeler would be stepping down, showing hopes that a new leader could help drive a turnaround.

That general momentum was able to overcome a weak second-quarter earnings report, and the stock is now up nearly 1,000% since it bottomed out in early July.

According to data from S&P Global Market Intelligence, the stock jumped 142% over the course of the month. As the chart shows, it was a volatile month for Opendoor, but the upward movements clearly outnumbered the pullbacks.

OPEN data by YCharts

Retail investors are still in

Toward the end of July, there were signs that the rally in the stock was fading after trading volume had soared earlier in a meme stock rally that seemed to begin with an argument on social media platforms like X and Reddit. Hedge fund manager Eric Jackson argued that the stock could be the next Carvana, since Opendoor was essentially left for dead as investors gave up on the home flipper’s business model due to a weak housing market and disappointing financial results.

Opendoor stock got a second wind in August after a subpar unemployment report kicked off August, sending the stock higher on hopes that it would lead the Fed to cut interest rates. The stock then pulled back after its second-quarter earnings report showed the business is still struggling, and its guidance called for revenue to fall on a sequential basis in the third quarter. It began a new rally in the second week of the month as an inflation report added to hopes that the Fed would cut interest rates, and Wheeler announced her resignation.

Finally, Opendoor stock jumped nearly 40% on Aug. 22 after Fed Chair Jerome Powell signaled in his Jackson Hole address that it would be appropriate to cut interest rates in September. The stock pulled back over the rest of August, but jumped again to start September.

Image source: Getty Images.

Can Opendoor keep gaining?

It’s been a remarkable rally for a stock that has now topped $5 a share, just two months after it was trading around $0.50 a share. 

Opendoor is still a small company at a market cap of $3.8 billion, but at some point, the business will have to show real improvement. Still, for now, if interest rates do come down and the housing market starts to show signs of life, the stock is likely to move higher. 

Opendoor (OPEN 6.34%) stock is seeing substantial gains in Thursday’s trading. The iBuying real estate company’s share price was up 4.1% as of 1 p.m. ET and had been up as much as 11.7% earlier in the session.

After big sell-offs in Tuesday’s and Wednesday’s daily sessions, Opendoor stock is seeing some recovery momentum in today’s trading. While there are no clear-cut, business-specific catalysts behind the move, there are a couple of factors that could be playing a role in the company’s gains today.

Image source: Getty Images.

Opendoor stock rises as Q2 GDP comes in higher than expected

The U.S. Commerce Department published gross domestic product (GDP) data for this year’s second quarter this morning, and growth came in stronger than anticipated. U.S. GDP grew at a 3.3% annual rate in Q2, topping the average economist forecast’s call for growth of 3% in the period. While the real estate market has been seeing some mixed indicators lately, stronger GDP growth could help support home sales and create a more favorable operating backdrop for Opendoor.

Did Opendoor stock inadvertently get a boost from Mad Money‘s Jim Cramer?

In yesterday’s episode of Mad Money on CNBC, host Jim Cramer said that Opendoor was a “meme stock” and said that he wouldn’t be jumping into the stock in hopes of profiting from the surge in bullish momentum it’s seen this year. As of this writing, the stock is up 164% across 2025’s trading.

While Cramer’s comments on the stock could come across as negative or ambivalent, they may have also had the effect of bringing more attention to the company. Additionally, many meme-stock traders seem to have a negative view on the Mad Money host’s coverage in general — and some intentionally make trades that are contrary to his positions. On the other hand, Opendoor has been prone to making big moves on little or no news recently — so it’s impossible to definitively state that the stock’s recent feature on Cramer’s show is a driving factor in its move today.

Shares of Opendoor Technologies (OPEN 27.50%) are flying higher on Friday, up 24.8% as of 1:15 p.m. ET. The jump comes as the S&P 500 gained 1.4% and the Nasdaq Composite gained 1.7%.

Federal Reserve Chairman Jerome Powell gave a speech this morning that signaled interest rate cuts could be coming. The news sent stocks across the market higher, but the effect was especially large for many riskier stocks like Opendoor’s.

Why Fed rate cuts matter for Opendoor stock

Speaking at the Fed’s Jackson Hole symposium, Powell highlighted that the economic picture is mixed with a lot of moving parts complicating the Fed’s decision. The Fed chief acknowledged that the economy is showing resilience, but downside risks are increasing. He appeared particularly concerned about tariffs potentially reigniting inflation. Still, he indicated cuts are coming, though he didn’t explicitly say so.

Opendoor stock flew higher on the news as more speculative investments like Opendoor tend to do better in low interest rate environments. The effect was even larger for Opendoor, however, because the company’s business model is heavily affected by interest rates. Rate cuts could help boost its bottom line.

Image source: Getty Images.

This meme rally could end for Opendoor stock

While the digital real estate disruptor operates in a massive market with genuine innovation potential, its competitive moat remains questionable. The meme-stock rally has been fueled by the idea that AI can unlock the company’s true potential. While the idea is interesting, there’s no guarantee it will work.

In the meantime, the company is operating in the red, relies heavily on debt, and the real estate market does not look particularly promising at the moment. I would avoid the stock.