Shareholders searching for confirmation that Opendoor is in its new era — not-so-subtly dubbed Opendoor 2.0 — might have found it in the company’s third quarter earnings.
Gone were monotone deliveries from CFO-turned-CEO Carrie Wheeler detailing the company’s efforts to cut costs and improve margins. Instead, the new CEO, Kaz Nejatian, in a black T-shirt emblazoned with the word “Faster,” spoke directly to the camera in a livestreamed presentation titled “Earnings and Chill.”
Nejatian, who came over from e-commerce giant Shopify where he most recently served as chief operating officer, was installed in the top spot a little less than three months ago in a populist, retail investor-driven uprising during which Opendoor’s share price rose by more than 10X at one point.
Nejatian did not respond to multiple direct messages on X, to which Opendoor’s press email now directs inquiries, stating that the company does not work with PR agencies “as we prefer to speak for ourselves.”
But Nejatian has been on a whirlwind tour of tech-guy podcasts, appearing on TBPN and a16z in the last few months to relate his rapid ascension.
As Nejatian tells it, he became “a little bit obsessed with Opendoor” in February, going so far as to text one of the company’s co-founders, Keith Rabois, that he wanted to take the company private “because it needs to be run better.” Ultimately, Nejatian did not buy the company and instead was nominated as the new CEO by a board that now includes Rabois and former Opendoor CEO and co-founder Eric Wu, giving him his opportunity to cure what he believes ails the company. Changes so far include mandatory return-to-office, a slew of hiring changes and an AI-above-all-else mentality.
But while Nejatian has brought the hallmarks of the “move fast, break things” ethos to a company he thinks has lost its way, it remains to be seen if he can solve the biggest problems in a business model — buying and selling homes online — that has never shown a clear path towards profitability.
The company traded over 27,000 homes last year, down from its peak of over 74,000 homes bought and sold in 2022.
A return to software
Nejatian inherited a company that was managing its decline, hoping that an eventual turnaround in the housing market could spark its own aboutface. By 2025, Opendoor had fallen a long way from the halcyon pre-IPO days of 2020.
Opendoor had raised billions in debt and equity on the idea that it could simplify the complex world of homebuying and selling in a field called iBuying, where it stocks a marketplace with homes it has actually purchased. For sellers, the value proposition was clear: Opendoor would buy your fixer-upper without the hassle of marketing, staging and dealing with physical buyers and their emotional questions about a place they plan to live. For buyers, Opendoor was building a marketplace of homes to search and purchase near-instantly (Opendoor introduced, and later scrapped, a “Buy It Now” button).
And for Opendoor and its investors, the company would make money on the spreads between purchase and sale price.
“The core concept of iBuying is awesome, like it really, truly is for some homeowners that want to sell with a click of a button,” industry analyst Mike DelPrete said. “The problem is nobody’s yet been able to provide that awesome customer proposition and a sustainable business model.”
Interest rates skipped in 2022, leaving Opendoor holding thousands of homes it couldn’t sell as the housing market cratered. Wu, who had served as CEO since 2014, stepped down at the end of 2023, and the company pulled back its buying activity drastically under Wheeler, who brought a money manager’s mindset to a company that had previously been trying to hit the jackpot.
“The core concept of iBuying is awesome, like it really, truly is for some homeowners that want to sell with a click of a button.”
The company’s stock price plummeted in the following years to below $1 — in danger of delisting — as Wheeler tried to stem the bleeding. A reversal of fortunes did not come from any shift in the business, however. Activist investor Eric Jackson posted in July that his firm had taken a position in Opendoor, and retail investors jumped in. The stock tripled in one week to $2.25. It now is trading above $6, although fluctuates mightily on a daily basis.
Its market capitalization of more than $6 billion now dwarfs its more stable competitors, including Compass, the country’s largest residential brokerage.
From that point on, the company — and its stock — seemed to respond more to Jackson’s tweets than anything else. When he posted on Aug. 6 that he was “really offended” about Wheeler seeming to dismiss the retail surge, dozens of commenters chimed in and called for a new CEO. A week later, Wheeler was out.
Nejatian has echoed Jackson and online commenters, claiming the company lost its way when it started focusing too much on pushing numbers around a spreadsheet.
“Our job is not to run a fucking hedge fund that aims to own assets and make money off of macroeconomics,” Nejatian told the San Francisco Standard. “Our job is to buy and sell lots and lots of homes at very tight spreads and make money off of transaction volume.”
Nejatian follows in a long line of swearing, slouchily dressed modern tech executives who seem to believe that nobody can be a true disrupter in a starched white button down.
“I’m no one’s idea of a corporate executive,” Nejatian, sporting yet another black T-shirt, said on the TBPN podcast. “I cuss a lot, I grew up as a nerd, I didn’t do all that well in my finance undergrad courses.”
“This is how I dress,” he added.
In Nejatian’s view, businesses are not built with Excel spreadsheets, do-nothing decks or wasteful meetings (at Shopify, Nejatian installed a meeting cost estimator that displayed how much the company spent on each meeting).
“When you go to business school, they’re like, ‘You shall have a business plan and it should be 17 pages and it should have like Porter’s Five Forces on it and that’s how it’s going to work,’” he said on a podcast. “And that’s just like generally not how great businesses are built.”
Nejatian, who moved to Canada at 12, has also followed the modern tech world’s increasingly rightward shift. Nejatian’s wife Candice Malcolm founded conservative news site True North (rebranded as Juno News), to which Nejatian and Malcolm have also contributed millions. The site came under fire for posting an interview last year with Gavin McInnes, founder of the far-right terrorist organization the Proud Boys. At Shopify, he shuttered several initiatives meant to support Black and Indigenous clients and came under heat from employees over his involvement with True North and political donations.
To some from Nejatian’s past, the changes coming to Opendoor look less like a revolution and more like the same old tricks.
“Literally cop[y]ing what he’s seen work at Shopify,” one user wrote in a thread on a private forum of current and former Shopify employees shared with The Real Deal. “Eventually the playbook drys[sic] up and he’ll be out of ideas to copy.”
“He pushed NFT real hard,” another wrote. “Using AI for everything is not vision; it’s wishful thinking.”
“Omg he’s going to be CEO???” another wrote on a thread about news of his move. “RIP to Opendoor.”
Like other politically conservative bosses, he is likely now leading a group of employees that skew liberal, one former Opendoor employee pointed out.
New model
So far, Nejatian has focused publicly on getting the company back to its tech roots and shipping products faster. In October, Opendoor launched a warranty feature for homebuyers, which allows them to return a home if they don’t like it within seven days.
“We are ditching manager mode,” Nejatian said on the company earnings calls. “We’re now firmly in founder mode. We are refounding this company. This is Opendoor 2.0.”
And the company has significantly ramped up its contract activity, according to a new dashboard on its website showing weekly purchases. In the first two weeks of November, Opendoor had contracts to buy an average of 282 homes per week, more than double its weekly rate over the summer.
In many ways, Nejatian appears to be trying to Elon Musk-ify the company, all the way down to his gaudy incentive-laden compensation package, layoffs and the relentless updates on X about progress. Nejatian is getting paid $1 in annual salary but stands to make up to $2.8 billion in equity incentives.
“Our job is not to run a fucking hedge fund that aims to own assets and make money off of macroeconomics.”
In September, Nejatian shared a memo sent to Opendoor employees that required employees to “default to AI” in their job. “We need to move faster — always. And we can’t do that without being AI obsessed,” he wrote. “So, starting today the first line in everyone’s job expectation is simply this: Default to AI”
After the company’s third-quarter earnings call, Nejatian posted that he was buying an additional $1M in stock.
The frenzied activity and posting has been the kind of thing that has kept the “$OPEN Army,” the nickname for the company’s rabid retail investors, charging the front lines.
When TRD reached out in a popular Discord server for Opendoor investors, one of the few responses was: “opendoor to the moon is all you need.”
Nejatian gave investors — both retail and institutional — a hard deadline for profitability: the end of next year. The company bought down over $200 million in convertible notes to clean up its balance sheet and issued tradable warrants with strike prices starting at $9 to cozy up to retail investors still riding the wave.
At the same time, Nejatian has been emphatic in his belief that Opendoor can be a “generational business,” the Amazon of home sales. It just needs the inventory, then the buyers will flood in to buy and sell homes, but also get their mortgages, insurance and who knows what else.
Industry insiders think we’ve seen this show before. Zillow and Redfin also got into iBuying, and Zillow ultimately lost more $1 billion in less than four years before shuttering its program in 2021.
“We did this experiment,” Jack Miller, president and CEO of T3 Sixty, a real estate management consulting firm, said. “We discovered there’s a certain amount of appetite in the market for a high-convenience sale, and now it’s just making that business be really performant and efficient and scaled correctly for the amount of demand.”
“The question is, is it a niche thing, or is it going to become a mainstream phenomenon that significantly changes how people sell houses and then buy houses in the future?” Brian Boero, CEO of consulting firm 1000watt, added.
One of Nejatian’s ideas is the tokenization of real estate transactions.
“Asset tokenization is not a side quest for us,” he said on the earnings call. “Tokenization allows us to increase the speed of transactions, decrease the cost of transactions, and broaden the base of homeownership.”
That belief goes back to a core principle of Opendoor, that real estate can be commoditized, stripped away of money-grubbing agents and mortgage brokers and as easy as ordering sesame chicken on your phone.
“In the future, buying a home will be as seamless as buying a car from Tesla,” Nejatian said. “You’ll choose your home, your financing, your warranty, your insurance, all in one place, all in one flow. Right now, homeowners have to deal with a bunch of different companies, brokers, agents, a lot of different stuff to get what they need for a house. That doesn’t make sense.”
But DelPrete, who tracked Opendoor 1.0’s downfall, said disrupting a complex and outdated industry like real estate isn’t that simple.
“It’s easy to say, we’re going to use software and AI to streamline the process and bring costs down, but you can’t use software and AI to replace the fact that there’s an actual home involved, with a basement and flooring and curtains and carpet and staging and real estate agents,” DelPrete said.
To a certain degree, Nejatian, who openly grimaces at Corporatespeak, has relied on the buzzwords of a different part of the business world, replacing “synergy” and “headwinds” with “AI” and “tokenization.”
If he can find a way to turn those words into tangible changes to one of the largest industries in the world, he could in fact have a generational business on his hands. If not, he’ll hear it in the retail investor forums.