Opendoor Stock Plunges 21% In Friday Pre-Market: What's Going On?

Shares of Opendoor Technologies Inc. (NASDAQ:OPEN) plunged 20.56% during the pre-market trading session on Friday after the company reported third-quarter results.

‘Refounding’ The Company

The company reported a revenue of $915 million for the third quarter, surpassing the estimated $849.59 million. However, it recorded a loss of eight cents per share, missing the anticipated loss of seven cents per share.

Opendoor bought 1,169 homes during the quarter, a steep drop from 3,504 in the same period last year. It sold 2,568 homes, also down from 3,615 in the corresponding quarter a year earlier.

CEO Kaz Nejatian stated, “We are refounding Opendoor as a software and AI company.”

Nejatian outlined the company’s outlook, projecting a 35% decline in fourth-quarter revenue as it undergoes rebuilding. Opendoor also expects an adjusted EBITDA loss for the quarter in the range of the high $40 million to mid-$50 million.

The stock fell over 10% in the after-market trading.

Opendoor’s Wild Ride From Meme Hype

The third-quarter results come after a period of significant volatility for Opendoor. The company’s stock was down by close to 20% over the past week, with hedge fund manager George Noble criticizing its “atrocious unit economics” and questioning its path to profitability. 

Earlier in July, Opendoor’s stock emerged as a trending meme favorite after hedge fund manager Eric Jackson touted it as a potential “100-bagger”. The stock quickly drew attention from meme traders due to its high short interest.

However, in September, shortly after Opendoor appointed a new CEO, Kaz Nejatian, CNBC commentator Jim Cramer hinted at ditching the stock. “We don’t want to be in a meme stock.”

Benzinga’s Edge Rankings place Opendoor in the 99th percentile for momentum and the 10th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here. 

Price Action: On a year-to-date basis, Opendoor surged 312.58%, as per Benzinga Pro. On Thursday, the stock plummeted 9.27% to close at $6.56.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.