Opendoor Technologies Inc. is in deep trouble these days. Its stock price is swinging all over the place after the company announced its last quarterly earnings statement. The proptech company posted a net loss of $29 million during its most recent quarter. That’s a dramatic turnaround from the $92 million deficit it recorded one year ago. Opendoor has lost billions of dollars in its recent quarterly earnings, down by nearly 70 percent. In calendar year 2022, their revenue was $15.6 billion, but ended up last year at only $5.2 billion.
To maintain its continued listing on the Nasdaq, Opendoor has been contemplating a reverse stock split. This suggested maneuver would inflate the price of each share by up to 50 times. As of the latest trading session, Opendoor’s stock closed at $2.52, though in post-market hours it dipped under $2. Stock suffered a catastrophic drop, reaching a low of 51 cents in late June. After that it has completely recovered since July and skyrocketed nearly five times!
Later, on the earnings call, CEO Carrie Wheeler thanked the investors for their excitement. She recognized the constructive attitude that the feedback givers took. “We appreciate your enthusiasm for what we’re building, and we’re listening intently to your feedback,” she stated. Wheeler referred to the company’s shift in strategy as “the most important strategic shift in our history,” indicating Opendoor’s transition from its traditional iBuying model to a more referrals-based approach that is less capital intensive.
Opendoor’s financial outlook remains cautious. The firm originally forecast revenue of $800 million to $875 million for the fiscal second-quarter just ended. This is a decrease of at least 36% compared to the same time last year. This is happening as we hear reports that the housing market has further worsened during the last quarter. “The housing market has further deteriorated over the course of the last quarter,” noted Selim Freiha, Opendoor’s finance chief.
With the goal of moving towards a sustainable business model, Opendoor has already announced efforts to reduce marketing expenses. In the third quarter, the company anticipates purchasing just 1,200 homes, a huge decrease from 1,757 in the second quarter and well below the 3,504 homes purchased in that period of 2024.
Investor interest is at a low point, but there are optimistic signs of a rebound. In July, prominent hedge fund manager Eric Jackson tweeted that his hedge fund Jackson Square Ventures had invested in Opendoor. For his part, BofA’s Miyahara was very bullish on the stock’s future appreciation. He thinks Opendoor’s stock could be worth up to $82 at peak.
In Q2, Opendoor saw overall revenues decrease by 4%, down to $1.57 billion. Unfortunately, this increase is likely not enough to make up for the net loss we’ve faced during the last 12 months.
Opendoor launched in late 2014. In late 2020, right in the middle of the COVID-era boom, it did so by going public through a special purpose acquisition company (SPAC). It’s no secret that the company is steering through stormy waters. It is proactively making adjustments to its business model to take the pulse of changing market conditions and investor sentiment.