Three months ago, Opendoor was so short on believers it risked being delisted from the Nasdaq stock exchange.
The iBuying company appears to have found them, and its stock price has seen a shocking resurgence.
After opening July 14 trading at $0.78, its 55th consecutive day opening under one dollar, Opendoor’s stock nearly tripled over the last week to close trading at $2.25.
At the time of publication, it was up another 45 percent to $3.26 today.
The turnaround appears to have been spurred on by Eric Jackson, a hedge fund manager at EMJ Capital, who posted on X last week that his firm had taken a position in the embattled iBuying company. (Jackson gained renown for taking a position in automobile e-commerce website Carvana, which has seen its stock rise over 1,000 percent since the bottom fell out in 2022.)
Jackson wrote that he sees potential for the stock to reach $82, citing the company’s cost-cutting efforts and reduced competition after Zillow and Redfin shuttered their iBuying operations.
iBuying companies make money by purchasing undervalued homes with cash and flipping them for a profit, as well as on the service fee they charge.
The industry has faced hard times as the American housing market has struggled to grow amid high interest rates that have locked in would-be sellers to their previous low rates and hamstrung potential buyers’ purchasing power.
Existing homes sales fell 0.7 percent in May from the previous year, according to data from the National Association of Realtors. Lawrence Yun, NAR’s chief economist, blamed “relatively subdued sales” on persistently high mortgage rates.
Offerpad, one of the other remaining competitors in the space, has caught some of Opendoor’s momentum. After receiving a notice in April from the New York Stock Exchange that it faced delisting because of a low market capitalization, its stock price has surged 70 percent since July 14.
While the recent price runup for Opendoor has pushed it well out of delisting danger territory, it’s still a far cry from its $35 per share peak in 2021, which it reached amid a buoyant housing market before the Federal Reserve began raising interest rates.
In 2022, the company lost over $1 billion, along with its co-founder and CEO Eric Wu. Since then, it has engaged in aggressive cost-cutting, laying off 300 workers in 2024 following a third-quarter loss of $78 million.
Opendoor will announce its second-quarter earnings on Aug. 5, where recent investors will see if the company has begun turning a corner.