TLDR
- Opendoor stock rose 14.5% Wednesday after announcing nationwide expansion plans under new CEO Kaz Nejatian
- Former Shopify COO named CEO as co-founders Keith Rabois and Eric Wu returned to board leadership roles
- Company achieved first positive adjusted EBITDA since 2022 at $23 million in Q2 but Q3 guidance turned negative
- Stock up 538% year-to-date as retail investors battle prominent short sellers over company’s future prospects
- Revenue guidance for Q3 drops to $800-875 million with margins expected to compress from recent levels
Opendoor Technologies shares gained 14.5% Wednesday following the company’s announcement of nationwide expansion plans. The real estate technology platform continues building momentum under new leadership.
The stock added over 3% in premarket trading Thursday. This extends a remarkable 538% year-to-date rally that has drawn both supporters and critics.
Former Shopify executive Kaz Nejatian took over as CEO in September. His appointment came alongside the return of co-founders Keith Rabois and Eric Wu to the board.
Rabois now serves as chairman while Wu rejoined as a director. The leadership team described this shift as entering “founder mode” to accelerate decision-making.
The nationwide expansion represents management’s confidence in the business model. Opendoor plans to extend its home-buying and selling services across all U.S. markets.
Mixed Financial Performance Creates Questions
Second quarter results showed both progress and persistent challenges. Revenue reached $1.6 billion while the company sold 4,299 homes during the period.
Opendoor achieved $23 million in adjusted EBITDA, marking its first positive quarter on this metric since 2022. Management highlighted this milestone as proof the model can generate profits.
However, third quarter guidance painted a different picture. Revenue is projected to fall between $800 million and $875 million.
Adjusted EBITDA is expected to return to negative territory. The company cited headwinds from older inventory with lower margins due to reduced acquisition volumes.
Contribution profit margins face compression from second quarter levels. High mortgage rates continue suppressing buyer demand while limiting new home listings.
Investor Sentiment Remains Split
Retail investors have embraced the expansion news and leadership changes. Stocktwits sentiment stays in bullish territory despite recent volatility.
Crypto investor Anthony Pompliano defended the stock on social media after buying shares last month. He criticized Wall Street shorts for focusing on past performance rather than future potential.
However, prominent skeptics have emerged. Former hedge fund manager Martin Shkreli recently disclosed a short position in Opendoor shares.
Andrew Left from Citron Research called the company “nothing more than a stock promo and a science project in how to burn money.” These high-profile shorts add pressure on management to deliver results.
The stock’s meteoric rise has created both opportunity and risk for investors. Large moves can become self-reinforcing but also reduce room for execution errors.
For the rally to continue, management needs to demonstrate reaccelerated home acquisitions and steadier contribution margins. Sustained progress toward positive adjusted EBITDA will prove crucial for validating current valuations.
The nationwide expansion announcement represents the clearest signal yet of management’s confidence in executing this turnaround under new leadership.
