This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Where to start with this one? Perhaps I should begin with the erstwhile "SPAC King" Chamath Palihapitiya, who led investors towards gargantuan losses once the SPAC bubble burst in late 2021. Or, maybe I should commence with leverage junkies who populate various stock fora, egging mom-and-pop investors to speculate in risky names. After all, Opendoor is a risky bet by any definition of the term.
For the benefit of those who might not be aware, Opendoor became a public company in the heydays of the SPAC bubble by merging with Social Capital Hedosophia Holdings Corp. II, one of nearly a dozen SPACs launched by Chamath Palihapitiya, an ex-Meta executive and a venture capitalist.
Opendoor sidesteps the usual bottlenecks within the residential real estate sector by purchasing homes directly from their owners, eliminating the need for brokers entirely. The company then undertakes quick refurbishments and resells purchased property, making money from the spread between the purchase price and the selling price of any given property.
Opendoor attracts customers via the convenience that it offers: a seamless process and a quick path towards a cash offer. The company's business model is designed to optimize housing turnover, while minimizing expenses such as realtor brokerage fees.
Interestingly, and wholly in line with the trend among de-SPAC'd companies, Opendoor has never generated any profit. For Q1 2025, the company reported $1.2 billion in revenue, and a net loss of 85 million. Its inventory of purchased homes also increased by 26 percent on an annual basis, rising to 7,080 homes by the end of Q1.
Meme Stock Mania Strikes Again With Opendoor
This brings us to the crux of the matter. Opendoor shares have increased by 211 percent over the past five trading days.
Of course, Monday's trading activity figures for the high-flying stock were one for the history books: 1.9 million Opendoor shares changed hands, capturing around 10 percent of the total trading activity on US stock exchanges for the day, as per a tabulation by Bloomberg's Yiqin Shen.
What's more, Monday also saw around 2 million Opendoor call options change hands, constituting the third highest total for any given stock in 2025, and eclipsing the combined call volume for NVIDIA and Tesla for the day.
According to Goldman Sachs, trading activity in penny stocks exceeds NVIDIA's when retail investors are active in the market. And, Monday saw around 19 penny stocks exceed NVIDIA's trading activity threshold.
Of course, this elevated activity could not come at a more inopportune time. According to Goldman Sachs Chief Economist, Jan Hatzius, the housing market in the US is poised for an accelerated slowdown, with residential fixed investment likely to have dropped by 10 percent in Q2.
Also, in what is likely to be a bad omen for Opendoor, around 87 percent of current mortgage holders have borrowed at a rate that is below current levels. This disparity is depressing housing turnover. Sales of existing homes in 2025 are likely to total just 4.1 million units, which represents an activity level that is 23 percent below 2019 levels.
Of course, these brewing dark clouds are completely in line with the performance that can be reasonably expected from Chamath Palihapitiya-linked companies, whose other bets, including Virgin Galactic, have largely floundered. SoFi Technologies remains an exception though.
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