On one particular day, OpenDoor Technologies (OPEN 10.74%) shares experienced an increase exceeding 30% due to a meme-fueled surge. However, the upward trend appeared to be slowing, suggesting that this rally – which seems to be a blend of short squeeze and meme stock dynamics – might be losing momentum.
By 2:36 p.m. Eastern Time, shares of Opendoor were rising by 8.4%, due to heavy trading activity. Earlier in the day, they had surged over 30%.
The Opendoor surge continues
In recent weeks, the value of Opendoor shares has significantly increased by over three times. This surge appears to have been influenced by a post on Reddit’s WallStreetBets forum that suggested Opendoor might follow in the footsteps of Carvana, which experienced a staggering growth of over 10,000% since its recovery from the brink of bankruptcy a few years back.
The increase in the stock price has led to an unprecedented surge in trading activity, with over 466 million trades recorded by 2:39 p.m. ET so far. Given that there are only 729 million shares available, this means that more than 60% of all shares have been traded, and the day’s trading is not yet complete.
It is possible that Opendoor is currently undergoing a prolonged “short squeeze,” since about 24% of the company’s stock was previously sold short one month ago. With the recent increase in the stock’s value, it seems likely that the short-sellers are now choosing to close their positions. Despite the current trading volume, they should not have difficulty covering their shorts. In simpler terms, this means that due to a rise in Opendoor’s stock price, those who had previously bet against it may be forced to buy back the shares they borrowed, which could further drive up the stock price.
What’s next for Opendoor
In the early hours of trading, I noticed a significant jump in Opendoor’s stock price during the pre-market session, reaching a peak soon after the market officially opened. However, it seemed the momentum didn’t last long as the stock subsequently gave back most of its gains, suggesting that the rally might have reached its limit.
The argument for a rise in this company’s stocks appears weak given the current slowdown in the housing market, and with interest rate reductions looking less probable following the recent inflation report. However, it’s important to note that meme traders have shown a keen interest in this stock, which means it may exhibit increased volatility in the near future.
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2025-07-17 23:19