TLDR
- Opendoor Technologies shares surged after CEO Kaz Nejatian announced plans to issue warrants to existing shareholders, a move he claims could “ruin the night” of short sellers who hold nearly 22% of outstanding shares.
- The company will distribute three warrants for every 30 shares held, with strike prices at $9, $13, and $17, forcing short sellers to cover these distributions on borrowed shares.
- Opendoor missed Q3 2025 earnings expectations with revenue of $915 million but posted worse-than-expected losses of $0.08 per share versus the estimated $0.07.
- The company is quietly redeeming convertible bonds through an exchange offer, which will increase share count and cause dilution for existing shareholders.
- Short sellers face pressure as they must either buy the warrants or exit positions entirely, potentially triggering a short squeeze as meme stock traders pile into the stock.
Opendoor Technologies stock jumped last week following an unexpected announcement from CEO Kaz Nejatian. The real estate iBuyer’s shares initially dropped after reporting mixed Q3 2025 results on November 6.
Opendoor Technologies Inc., OPEN
Revenue came in at $915 million, beating the $850 million estimate by $75 million. However, the company posted an adjusted EBITDA loss of $33 million, worse than the expected $24.4 million loss.
Losses per share hit $0.08, missing the $0.07 forecast. The turnaround plan remains incomplete as the housing market shows mixed signals.
Interest rates have declined, but housing demand continues to slow. The company aims to reach break-even profitability next year through AI enhancements to its business model.
After the initial earnings day drop, shares reversed course and climbed higher. The catalyst came during the post-earnings conference call when Nejatian revealed his controversial plan.
The Warrant Distribution Plan
Opendoor will distribute three separate stock warrants for every 30 shares held as of November 6, 2025 at 5 p.m. These warrants allow shareholders to purchase additional shares at strike prices of $9, $13, and $17.
Nejatian stated this move could “ruin the night” of short sellers. Short interest in Opendoor stands at nearly 22% of outstanding shares.
Short sellers borrow shares to sell them, making them responsible for any dividends or distributions. These warrant distributions create a costly problem for shorts.
They must either purchase the warrants at market prices or close their positions entirely. Either action puts upward pressure on the stock price.
Meme stock traders have latched onto Opendoor in recent months. The warrant announcement fueled another wave of buying from this group.
Dilution Concerns Mount
The company is simultaneously redeeming outstanding convertible bonds through an exchange offer. This redemption will increase the total share count, diluting existing shareholders.
Additional dilution could occur if the stock price rises above the warrant strike prices. Shareholders would likely exercise their warrants, creating more shares.
The company’s year-to-date price performance shows a 410.69% gain. Current market capitalization sits at $7.74 billion with average trading volume of 259 million shares.
Analysts maintain a Hold rating on the stock despite the recent volatility. They cite the company’s ongoing losses and uncertain path to profitability.
The debt reduction improves Opendoor’s balance sheet and cash position. But the cash influx means little if operating losses continue to mount.
The company averaged $24.4 million in quarterly EBITDA losses, according to analyst estimates. Actual losses exceeded that figure by $8.6 million in Q3.
Technical sentiment signals currently show a Buy rating. However, the fundamental picture remains cloudy as the company works toward profitability.
The warrant distribution takes effect for shareholders of record from November 6, 2025 at 5 p.m. Short sellers now face decisions about covering their positions or buying the distributed warrants.
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