Opendoor Technologies Stock Skyrockets: Here’s Why Traders Are FOMOing In
Another day, another meme-stock moon mission—this time it's Opendoor's turn. The iBuying disruptor's shares ripped higher today as Wall Street rediscovers its love for speculative real estate plays. Let's break down the action.
Algorithmic traders pile in
High-frequency funds jumped on unusual options volume, triggering a gamma squeeze that left short sellers scrambling. The stock's 15% surge burned bears who bet against the proptech player's comeback story.
Retail investors smell blood
Reddit's r/WallStreetBets crowd piled into OTM calls, creating a self-fulfilling prophecy. Volume hit 3x the 30-day average as day traders chased momentum—because nothing says 'sound investment strategy' like following anonymous internet randos.
The cynical take
Fundamentals? Who needs 'em. In today's market, stocks either go to zero or infinity—and Opendoor's betting big on option B. Just don't look at their cash burn rate while the music's still playing.
Image source: Getty Images.
Could Opendoor finally catch a break?
The housing market has been nearly frozen since interest rates soared in 2022, which crushed the online home-flipper's business along with others that depend on real estate transactions.
The stock was trading below $1 this year before a meme stock rally pushed it higher, and the situation was bad enough that the company was considering a reverse stock split to remain listed with the Nasdaq.
Management has taken steps to streamline the business with layoffs and cost cuts, and it's slowing the pace of home purchases, but the company will likely need mortgage rates to fall and housing demand to strengthen in order to turn a profit.
Can Opendoor keep gaining?
Opendoor surged earlier in July on a meme stock rally and is still up about 300% from when that started, so its share price looks volatile.
The jobs report is just one data point, though it's likely to encourage the Fed to cut rates, especially if other data shows the economy is weakening.
Opendoor will report earnings next week, giving investors a view into its current prospects. Analysts are expecting revenue to be flat at $1.5 billion and for its loss per share to narrow from $0.04 to $0.02. The stock is likely to remain volatile, given the uncertainty in the macroenvironment and the recent interest from meme stock investors.
