The beleaguered actual property expertise firm is looking for a brand new CEO.
Shares of Opendoor Applied sciences (OPEN 11.18%) have shot up as a lot as 81% this week, in response to knowledge from S&P International Market Intelligence. As of 1:29 p.m. ET Friday, Aug. 15, Opendoor inventory is up 68.7% from final Friday’s shut.
The true property platform and iBuying firm is seeing renewed curiosity from buyers as a meme inventory and lately introduced a seek for a brand new CEO. As a darling of the 2021 SPAC craze, Opendoor shares are down 90% from all-time highs, however are up over 100% 12 months so far (YTD).
Here is why Opendoor inventory was hovering this week.
Introduced CEO search, meme inventory mania
Opendoor has become a meme inventory as a result of its excessive quick curiosity, which sits at an estimated 23% of its excellent shares. Excessive-profile buyers have begun to advertise the inventory on monetary media retailers, which has pushed the share value increased and with main volatility.
This saved driving Opendoor’s refill increased this week. Now, the corporate has introduced the retirement of present CEO Carrie Wheeler and a seek for a brand new chief for the corporate.
It’s unclear why a brand new supervisor was wished now, however this has gotten meme inventory buyers much more bullish and despatched the inventory increased in buying and selling right now.
Picture supply: Getty Pictures.
The numbers behind Opendoor
Opendoor inventory is likely one of the finest performers of this summer season. Nonetheless, its financials don’t again up this story.
Final quarter, Opendoor reported income of $1.6 billion, gross revenue of simply $128 million, and a internet lack of $29 million. The corporate has by no means generated constructive internet revenue, with a $300 million internet loss over the past twelve months.
Opendoor’s enterprise mannequin revolves round shopping for houses from folks, fixing them up, and promoting them on the open market, hopefully at a better value. That is what’s often called dwelling flipping, with iBuying taking this mannequin from people and bringing it to a nationwide scale. Thus far, Opendoor has not confirmed it will possibly really scale this mannequin and generate a revenue.
Its income is down nicely from all-time highs. The corporate is struggling to develop due to the debt wanted to finance dwelling purchases, which places it in a little bit of a pickle.
This isn’t enterprise mannequin, and regardless of who the CEO is, you can not change the difficulties of dwelling flipping. Opendoor stays a meme inventory, however it’s not an excellent long-term funding.
Brett Schafer 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.
