As Opendoor has risen nearly five times since the start of July and trades volumes that have reached record levels, CEO Carrie Wheeler thanked investors for their “enthusiasm” in Tuesday’s revenue call.
“We want to acknowledge the high interest in Opendoor recently, and we are grateful for that,” Wheeler said. “We appreciate your enthusiasm for what we are building and we are listening diligently to your feedback.”
Before the recent surge, most of the OPENDOOR stock was abandoned, dropping by 51 cents in late June. The situation was so disastrous that the company was considering a reverse split that could raise the price of each share by 50 times as a potential way to maintain the list of NASDAQs. Opendoor said it had returned to compliance last week and cancelled its reverse split proposal.
Opendoor’s business focuses on using technology to buy and sell homes and pocket profits. The company was founded in 2014 and was made public through a special purpose acquisition company (SPAC) during the Covid era boom of late 2020.
Revenues have sunk about two-thirds from $15.6 billion in 2022 to $5.2 billion last year.
Much of the stock’s bounce over the past six weeks has been spurred by hedge fund manager Eric Jackson. Jackson said he believes Opendoor’s shares could ultimately reach $82. It closed at $2.52 on Tuesday, then fell below $2 in an extended transaction.
Jackson’s bet is that revenue growth and market share increase will lead to profitability, resulting in investors being attributable to multiple reasonable sales of their business.
The turnaround still does not show much evidence that it is working. In the second quarter, Opendoor reported revenues increased by around 4%, an increase of $1.57 billion. That net loss has shrunk from $92 million the previous year, or 13 cents, to $29 million, or 4 cents per share.
For the current quarter, Opendoor forecasts revenues of just $800 million to $875 million. This represents a decline of at least 36% from the previous year. Opendoor said it plans to acquire only 1,200 households in the third quarter, starting from 1,757 in the second quarter and 3,504 in the third quarter of 2024.
“The housing market has been worsening over the last quarter,” Financial Director Selim Freiha said in a revenue call Tuesday. “Mortgage rates with sustained high mortgage rates continue to curb buyer demand, lead to lower clearances and record new lists.”
Wheeler highlighted Opendoor’s efforts to expand its business beyond what is called Ibuing and to expand its business into more referral businesses that are not capital-intensive. She called it “the most important strategic change in our history.”
Investors bidding on stocks in the wave were not enthusiastic about what they heard. But at least there are people who are listening at the end.
“This increased visibility is an opportunity to tell our story to a larger audience,” Wheeler said. “We’re going to make the most of it.”
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