The most recent meme inventory continued its wild experience.
Shares of Opendoor Applied sciences (OPEN 18.46%) jumped on Monday, ending the day up 18.5%. The spike comes because the S&P 500 and Nasdaq Composite each completed down 0.3%.
The actual property expertise firm, which has lately turn out to be one of many latest meme shares, is seeing shares recuperate after final week’s poor earnings report.
Opendoor shares spike after final week’s fall
Final week, Opendoor reported earnings displaying that though top-line income got here in above the corporate’s prior steering, the corporate remains to be working deeply within the purple, and that the income development would reverse and decline sequentially for the subsequent quarter.
This led to calls from the activist investor and hedge fund supervisor Eric Jackson — a key determine and catalyst in Opendoor’s meme inventory run — for the corporate’s board to exchange CEO Carrie Wheeler. His view, which seems to be held by lots of the retail traders driving Opendoor’s latest success, is that the corporate is sitting on an unlimited quantity of knowledge that would flip Opendoor into a man-made intelligence (AI)-powered actual property powerhouse.
Picture supply: Getty Photos.
Within the earnings name, Wheeler addressed operational updates however didn’t lay out a path to an AI-first platform. On Friday, she took to X to higher interact with the retail base, giving some traders hope that their issues can be addressed and AI will turn out to be a spotlight.
Opendoor is excessive danger
Opendoor’s mannequin is extremely delicate to rates of interest. Traders are hoping its backside line will profit from lowered charges, that are wanting extra seemingly after final week’s weak jobs report. Whereas that is true, it’s potential that these fee cuts could be accompanied by a softening economic system during which housing costs might diminish. Opendoor operates in a particularly capital-intensive area, has largely detrimental free-cash flows and vital debt, and has but to show a revenue. I’d keep away from this inventory.
Johnny Rice has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
