Opendoor Technologies ($OPEN) Stock: Shares Surge on Keith Rabois’ Comeback Push

TLDR

• Opendoor (OPEN) closed at $6.65 on September 5, up 11.58%, with pre-market trading rising to $7.24.
• Shares surged 49.44% over four weeks, hitting a 52-week high of $6.85 as investors backed founder Keith Rabois’ board return.
• Activist investor Eric Jackson urged a leadership shift, contrasting Rabois’ bold strategy with former CEO Carrie Wheeler’s cautious style.
• Optimism was supported by expectations of lower interest rates from the Federal Reserve, which may aid housing affordability.
• Despite strong stock momentum, Opendoor reported a $305M net loss and negative 5-year returns, highlighting risks.

Opendoor Technologies Inc. (NASDAQ: OPEN) stock closed at $6.65 on September 5, gaining 11.58%, and advanced further to $7.24 in pre-market trading.

Opendoor Technologies Inc. (OPEN)

The surge comes as shares rallied behind a hedge fund campaign to reinstate co-founder Keith Rabois on the board, a move seen as key to reviving the real estate technology firm’s momentum.

The stock soared nearly 50% in the past four weeks, marking a new all-time high. On Friday, the company touched a 52-week high of $6.85 before paring gains.

Leadership Debate

Investor Eric Jackson, a major shareholder, has championed the return of Rabois, whom he views as bold and visionary compared to former CEO Carrie Wheeler’s more cautious approach. Jackson argued in a post on X that Opendoor could rise to as high as $82, $200, or even $500 with stronger leadership.

This leadership push has resonated with investors who see Rabois’ strategy as better suited to navigating challenges in the real estate market.

Market Sentiment Boosted by Fed Outlook

Positive sentiment was also fueled by speculation that the Federal Reserve may cut interest rates at its next FOMC meeting. Lower borrowing costs could improve housing affordability, benefitting Opendoor’s home resale business model.

As a company that acquires, renovates, and resells residential properties, Opendoor is highly sensitive to financing conditions. A favorable rate environment could provide a significant tailwind.

Financial Highlights

Despite recent stock momentum, Opendoor’s financials reveal underlying challenges. The company reported revenue of $5.18 billion over the trailing twelve months, with a net loss of $305 million and diluted EPS of -$0.43. Its profit margin stood at -5.89%, reflecting continued pressure on operations.

The company carries a debt-to-equity ratio of 346.12%, balanced somewhat by $789 million in cash and $348.5 million in levered free cash flow. With a market cap of $4.89 billion, Opendoor’s valuation remains modest at a price-to-sales ratio of 0.92.

Performance Overview

Opendoor has posted impressive short-term gains. Year-to-date, shares are up 315.63% versus the S&P 500’s 10.20%. Over one year, OPEN gained 234.17%, but the longer-term picture is less favorable. Over three years, returns were 62.20%, and across five years, shares are still down 44.58%, underperforming the S&P 500’s 89.13%.

The campaign for Rabois’ return has injected fresh optimism, but with profitability still elusive and high debt levels, investors face both potential upside and significant risks.

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