On Tuesday, shares of Opendoor Technologies (OPEN) are experiencing a decline, currently dropping by 6% at 3:03 p.m. ET, with a dip as substantial as 16.8% earlier in the day. This drop occurs amidst minimal changes in the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC).
Opendoor’s shares are experiencing a pullback following their impressive rally. It seems the company’s stock has joined the list of meme stocks, with its growth primarily fueled by increased participation from individual investors.
The latest meme stock
The technology firm known as Opendoor Technologies, which simplifies the process of buying and selling real estate through automation, has recently gained popularity as a meme stock. This surge is largely due to individual investors, particularly those from Reddit’s Wallstreetbets community. Over the past month, the stock price has increased by an impressive 440%. The upward trend began when hedge fund manager Eric Jackson of EMJ Capital announced his firm had invested in Opendoor, describing it as a potential “100-fold” investment opportunity.
Opendoor is experiencing a crucial juncture, as its shares were trading below $1 and faced a delisting threat from Nasdaq. Companies that fail to maintain a share price above $1 could be removed from the exchange.
Risks remain for Opendoor
Regardless of the excitement surrounding it, Opendoor faces substantial financial challenges. Its revenue has taken a steep dive from its peak in 2022, with the current annual rate falling significantly short of that year’s sales. To put it into perspective, the company’s 2022 sales are more than twice what it’s projected to bring in this year. Additionally, Opendoor has yet to record a profit and is experiencing substantial cash outflows.
Recently, there have been encouraging developments. For instance, the company has shown growth in both its revenue and profit margins between Q4 2024 and Q1 2025. Additionally, there’s a noticeable improvement in its Earnings Before Taxes, Interest, Depreciation, and Amortization (EBITDA) as well.
The popularity of this investment stems from the assumption that it will maintain its current trajectory and successfully undergo a transformation. However, I have reservations about it, and given its recent remarkable surge, I would advise against investing in it.
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2025-07-22 22:55