Opendoor’s Rally Raises Questions on Long-Term Viability

Opendoor Technologies has staged a remarkable comeback, with shares climbing nearly 500% in the past three months after investor Eric Jackson touted its potential for 100-fold returns. Heavy short interest helped fuel the surge, turning the once penny stock into a retail trading favorite. Despite this momentum, the stock remains down about 90% from its peak, reflecting ongoing doubts about its business model and path to profitability.

The iBuying pioneer, which buys and resells homes, was hit hard when housing prices stalled in 2022, resulting in steep losses. Leadership changes and new platform features, such as Cash Plus—offering sellers cash advances and shared upside on resale—have been introduced to restore growth. Yet financials remain under pressure. Last quarter revenue grew just 4% year over year, margins fell to 8.2%, and the company posted another net loss, adding to over $300 million in losses across the past year.

At a market cap of $3 billion, investors are betting Opendoor can scale into a larger share of the trillion-dollar housing market. However, persistent losses, high debt costs, and reliance on inventory-heavy operations raise questions about sustainability. Even optimistic profit scenarios suggest limited upside relative to current valuation.