Opendoor Technologies Stock Crashes: What’s Behind the Bloodbath?

Another day, another tech stock getting slaughtered. Opendoor Technologies shares are nosediving today—joining the hall of fame of overhyped disruptors that forgot profitability exists.

Market Punishes Opendoor’s Reality Check

No sugarcoating here: investors are dumping Opendoor like a bad NFT. The iBuying darling’s model—snapping up homes with algorithms and flipping them—is getting crushed by rising interest rates and a cooling housing market. Who could’ve seen that coming? (Answer: anyone who remembers 2008.)

Wall Street’s Love Affair Turns Sour

Analysts are slashing targets faster than a crypto trader liquidating margin positions. Opendoor’s ‘growth at all costs’ mantra isn’t playing well when costs include burning $300M last quarter alone. But hey—at least they’re disrupting something. Mostly their shareholders’ portfolios.

One thing’s clear: when the housing market gets shaky, iBuying looks less like innovation and more like a leveraged bet dressed in tech jargon. Will Opendoor pivot or perish? Place your bets—preferably with money you can afford to lose.

Image source: Getty Images.

Opendoor stock sinks following reverse split postponement

Opendoor saw a massive rally earlier this month after Eric Jackson, who founded and manages EMJ Capital, said that he was bullish on the stock. His support for the company as an investment helped Opendoor achieve meme-stock status, and retail traders rushed in to buy shares in hopes of scoring big gains in a short period of time. Depending on when they bought, some investors had the opportunity to score huge profits trading the stock -- but the meme momentum now seems to be losing some steam.

What's next for Opendoor?

While not needing to conduct a reverse stock split to remain in compliance with Nasdaq requirements WOULD be a positive development, some investors may be worried that the company is gearing up to sell new shares soon. Selling new shares at an elevated valuation level could help Opendoor improve its balance sheet -- but there's a catch.

Issuing new stock in order to raise funds could send Opendoor's share price significantly lower -- potentially pushing it much closer to the $1-per-share threshold. Raising funds through a stock sale could significantly improve the company's financial footing, but the stage looks set for Opendoor to continue being highly volatile in the NEAR term.