Opendoor (OPEN) Stock: Surges 78% as Shopify Veteran Takes the Wheel

TLDR

Table of Contents

Opendoor named former Shopify executive Kaz Nejatian as new CEO, triggering a 78% stock jump
Co-founder Keith Rabois returns as chairman of the board after pressure campaign ousted previous CEO
Stock hit 52-week high and is now up over 500% year-to-date despite business challenges
Company enters “founder mode” with original leadership team returning to guide operations
Shares traded below $1 earlier this year and faced potential Nasdaq delisting

Opendoor stock rocketed Thursday after the company named Kaz Nejatian as its new CEO. The former Shopify executive’s appointment sent shares up 78% to hit a 52-week high.

Co-founder Keith Rabois also rejoined the company as chairman of the board. The leadership changes mark a dramatic turnaround for the real estate technology company.

Former CEO Carrie Wheeler resigned last month following intense investor pressure. Hedge fund manager Eric Jackson and Rabois led a public campaign criticizing her leadership.

The stock surge continues an incredible run for Opendoor this year. Shares are now up more than 500% year-to-date, making it one of the market’s biggest winners.

Return to Founder Mode

Opendoor said it’s going into “founder mode” by bringing back original leadership. Eric Wu, who served as the company’s first CEO before stepping down in 2023, also returned to the board.

The leadership overhaul comes as the company faces major business challenges. Rising mortgage rates have crushed the housing market, making Opendoor’s home-buying model difficult to execute.

Nejatian said the company will use artificial intelligence to make buying and selling homes “radically simpler, faster and more certain.” This represents a potential pivot from the company’s traditional iBuying approach.

The new CEO brings significant tech experience from his time at Shopify. His background in e-commerce platforms could help Opendoor develop new technology solutions.

Meme Stock Momentum

The stock’s performance has been driven more by social media buzz than business fundamentals. Eric Jackson built a massive following on X partly due to his successful bet on Carvana before turning attention to Opendoor.

Jackson’s endorsement sparked retail investor interest that pushed the stock from below $1 to over $10. The dramatic price swings have made Opendoor a favorite among meme stock traders.

Revenue increased 34% year-over-year in the second quarter, showing some business improvement. Net losses also decreased from $92 million to $29 million compared to last year.

However, home purchases dropped 63% year-over-year as the housing market remains frozen. The company only bought 1,757 homes in the quarter, down from over 4,700 last year.

New Agent Partnership Program

Opendoor recently launched a program to work with outside real estate agents. The pilot program showed promising results with double the customers ready for cash offers.

This capital-light model could provide new revenue streams without requiring large inventory investments. The company has expanded the pilot to all regions and is training agents to partner with them.

The Federal Reserve signaled interest rate cuts are coming, which could help revive the housing market. Lower rates would make it easier for homeowners to sell and buy new properties.

Opendoor ended the quarter with $1.5 billion in inventory, representing 4,538 homes. This was down 32% from the first quarter as the company worked to reduce its holdings.

The company went public through a SPAC deal in 2020 at much higher valuations. Despite recent gains, shares remain far below their all-time highs reached during the pandemic housing boom.

Nejatian takes over a company with strong technology but facing a challenging market environment. His appointment represents investor hopes for a strategic turnaround under new leadership.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: