Why Shares of Opendoor Have More Than Doubled This Week

This week, the stocks of iBuying real estate platform Opendoor (OPEN) have experienced a significant surge. The increase is attributed to meme stock activity and anticipation that an active investor might become involved. Since the market closed on Friday, shares have skyrocketed approximately 109%, as of 2:48 p.m. ET Thursday.

The next big meme stock?

Meme stocks continue to resurface even after the GameStop incident, particularly when the market is thriving. As per Stocktwits’ editor-in-chief Tom Bruni, there was a fourfold increase in interest on the platform regarding Opendoor, as indicated by page views, from Monday to Tuesday this week.

This week, the popular Reddit community r/WallStreetBets, originally associated with meme stocks, also delved into Opendoor. By Wednesday, approximately 560,000 contracts involving bullish bets had been traded. As of late June, over a fourth of the company’s shares were sold short, which is an essential factor for causing a short squeeze.

Moreover, Eric Jackson, the founder of EMJ Capital, has been tweeting about the company this week and may become an activist investor. Jackson finds promise in the company’s iBuying platform, which allows people to sell their homes online more quickly. This platform then resells the properties. It is important to note that iBuying often comes with higher fees compared to what a real estate agent might charge.

Alongside his discontent towards leadership, Jackson proposed a potential valuation of up to $82 per share for the company, contingent on an effective turnaround strategy and favorable market conditions. Currently, the stock trades at approximately $1.56 per share.

Does the thesis have merit?

As a passionate follower of financial trends in the real estate market, I can’t help but notice that Opendoor, despite its asset-backed debt, has been burning through cash at a rapid pace and is carrying a significant amount of debt. This situation has been exacerbated by the high-interest rate environment, which has put a damper on many players in the real estate sector. However, if interest rates were to drop, it could provide a powerful boost for Opendoor and the industry as a whole.

In essence, I find Opendoor’s business model more captivating than other meme stocks like GameStop and AMC, which are struggling industries. However, given the financial hurdles and unpredictable macroeconomic conditions, it’s essential to view this as a highly speculative investment. Always invest only what you can afford to part with without impacting your overall financial stability.

2025-07-17 23:07

The next big meme stock?

Does the thesis have merit?

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